Real Estate FAQ

Here are all the answers to your real estate FAQ!

If your specific question is not answered here, please feel free to contact us to get your question answered.

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Frequently Asked Questions From Seller’s

What is the selling price of my home?

The selling price of a house depends on several factors. The most common ones are the neighborhood and what similar-sized houses are currently selling for. The age and condition of the house are important. Does it need major repairs? How active the market is matters. Like everything else, home prices vary depending on supply and demand.

How much is my home worth?

Most homeowners want to know how much their home is worth. This is another one that cannot be answered easily. Your realtor can help you come up with an accurate figure.

How do you determine how much my home is worth?

The most common method to determining the value of a home is by completing a comparative market analysis. A comparative market analysis is an in-depth evaluation of recently sold “comparable” homes in your area, that have sold in the past 6 months. A comparative market analysis (CMA), isn’t a crystal ball that determines what a home will sell for, however, if performed carefully, it should give you an accurate price range.

A CMA will take into account many features of not only a home, but also the local area and neighborhood.

Considerations of a CMA include, but is not limited too:

• Square footage
• Number of bedrooms and bathrooms
• General condition of the house, inside and out
• Upgrades to kitchen
• Window quality
• Roof age
• Lot features
• Location; primary or neighborhood street
• Style of residence
• Flooring type

Why is my home’s assessed value different than the market value?

A public tax assessor gives the assessed value for a property. 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.

What is an agent’s commission fee?

In a real estate transaction, the agent is usually paid a commission by the seller. Typically, the real estate commission fee is 6% of the home’s final sale price. In most cases, both the buyer’s agent and the seller’s agent split the commission fee 50/50. Both receiving 3%. Commission is negotiable, period. Don’t let any Realtor tell you otherwise.

Can I determine how much my home is worth from an internet website?

The answer to this frequently asked question is no. An internet site is not local to your real estate market.
These websites provide estimates of home values for practically any home in the United States. How is it possible that a website can provide an accurate home value for a home located across the country without seeing the house? These websites, use computer generated home values based on calculations and formulas. Inaccurate estimates create a false hope and lead to frustration.

What are the common closing expenses for home sellers?

There are expenses that the seller will have when selling a home. Typical closing expenses for home sellers include. DOC Stamps, Title Insurance, real estate commissions, title company fees, and some miscellaneous fees.

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

Many sellers believe they should price their home higher than what a realtor suggests to leave room for negotiations and low-ball offers. A well priced home will sell quickly and will sell for close to the listing price. A seller who prices their home high to leave room for negotiations can actually be costing themselves more money than if they price it to reflect the suggested market value.

What are the disadvantages to pricing my home above market value?

You will help sell similar homes that are priced lower, your home could be on the market longer, you can loose buyer interest, you can create a negative impression of your property, you can loose money though carrying costs, lenders and appraisers won’t agree with your inflated asking price, and, in the long run; you may very well have to lower your asking price to below market value to attract a buyer.

Do I respond to low ball offers?

When selling a home, look at it as a business decision rather than an emotional one. Unfortunately, you will get a low ball offer. Dealing with low ball offers can sometimes lead to the sale of your home. The worse thing you can do is not respond. Not responding will ultimately end any potential chance for a deal. A counter offer, is better than letting a potential buyer walk.

What happens if the appraised value comes in too low?

The banks appraiser is determining that the home’s value is at least what the buyer and seller have agreed on. If an appraiser determines that the value of the property is lower than the agreed purchase amount, there are a few options.

1. Seller Makes Concession
   This is the most common result when an appraisal comes in too low. The seller agrees to sell the home for the appraised value.
2. Buyer Comes Up With Difference
   The buyer must pay the difference between the purchase price and the appraised value. This is fairly uncommon as many buyer’s find it hard to pay more for a home than its appraised value.
3. The Transaction is Cancelled
   This is a common result from a property under appraising. If the buyer does not want to pay the difference and the seller does not want to adjust the sale price, the transaction is cancelled.
4. Challenge Appraisal
   Challenging the appraisal is not easy. Without solid evidence the chances of an appraised value being changed, are slim.

Do I have to sell to the person who submits the highest offer?

No, you can accept any offer that you like. Some offers are better due to the terms.
It is worth mentioning that you have signed a contract with a realtor who agreed to find a buyer, and effect a sale. Once you reject a full price offer, your realtor can ask for a commission based on that offer amount.

What is the difference between a list price and sale price?

The list price is the price a home is currently listed for sale at. The sale price is the price a home is sold for.

Are real estate listing prices negotiable?

Yes, almost everything in real estate is negotiable. Typically, there is a difference between a home’s list price and how much it actually sells for. The current market’s saturation will determine how much room there is for negotiation. If you’re the buyer’s, expect the house to be able to be purchased for less if there is a lower demand than supply in the market. If you’re the seller expect it to usually sell for less. That being said, you never know who else is house hunting. Sometimes people will offer the exact asking price.

How long does the listing agreement last?

When it comes to the length of a listing agreement, every real estate agent will prefer a different time length. One thing to keep in mind when asking about the length of a listing agreement is the average days on the market. If the average days on the market in your local real estate market are 75, a 90 day listing agreement may not be enough.

What happens if I’m not happy and want to cancel the contract with my realtor?

The hope when selling a home is a quick and easy sale and getting top dollar. This isn’t always the case though, every contract is different. If you decide to cancel the listing agreement, you could possibly be responsible for any expenses incurred by the real estate agent and their brokerage.

Can I back out of my contract with one buyer and accept a new, higher offer from a second buyer?
It is not wise to try to get out of a legal contract, unless it is absolutely necessary. The buyer can seek legal recourse.

What are seller concessions?

Depending on the type of financing the purchaser is obtaining, the option to receive seller concessions may exist. When a buyer is short on the money required to purchase a home, seller concessions allow a home owner to contribute a percentage or dollar amount towards a buyer’s closing costs and/or pre-paid items. For example, a buyer who qualifies for an FHA mortgage can receive up to 6% of the purchase price towards their closing costs. This can be the difference of a buyer being able to afford a home or the seller being able to sell their home.

What is a sale of Buyer’s home contingency?

Some buyer’s like to find a suitable new home before selling their existing home. A sale contingency is a common contingency in purchase offers. A sale contingency means that the buyer of a home must sell their existing home, before being able to purchase the new home.

How long will it take to sell my home?

Once the house is on the market, it may take anywhere from four to eight weeks to sell. However, if the market is fairly hot, a seller could see their house off the market within a week. If the market is slow or issues arise such as asking price, 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 real estate. Anyone walking through a house will be looking for ways to negotiate a lower price. Make sure that all systems are working properly. The home should look and smell clean and decluttered without damage.

Should I order a home inspection?

A pre-listing home inspected is never a bad idea, especially if you want to get the best price for your home. Many homebuyers will hire their own inspector. It’s better to be safe than sorry.

When is the best time to sell my home?

There is no simple answer. Every real estate market is different, the best time to sell a home will be different in every area. In most cases, the spring months are the most active selling period.

What should I disclose to potential buyers?

When selling a home, it’s important you disclose to potential buyers anything you are aware of in your home. If you’re aware of defects, you’re always going to be better off being honest and upfront. If you’re aware of defects, fixing them before listing your home is best. This can avoid potential issues and/or lawsuits once your home is under contract, after inspections, and after you have sold your home.

How is the real estate market right now?

There are many market indicators that a realtor should be able to share with you to help explain the condition of the local real estate market. One of the most important indicators on market conditions is average days on the market. The average days on market can indicate to a seller how quickly homes are selling when listed for sale.

Other examples of market condition indicators that a realtor will provide a home seller before listing their home include market absorption rates, average list prices, and average sale price.

Do I need to provide permits for any improvements that I have done?

In general, when making an improvement, a permit and a certificate of compliance are required. When selling a home, potential buyer’s have the right to ask for certificates of compliance for any improvements. Technically, you do not need to provide any permits or certificates of compliance, however, you could lose a potential buyer over a simple permit.

What should I do to prepare my home for showing?

A home that is well prepared for home showings will likely sell faster than it’s competition. Make sure your home is cleaned, de-cluttered, bright, and that no foul odors are present are the most important things to do to prepare your home for showing.

Can you recommend service providers who maybe needed throughout the transaction?

Yes; there is a list of professionals, that you might want to contact on our website; to help you throughout the home selling process.

What are some common bank required repairs?

If a home buyer is obtaining financing from bank, the bank will complete an appraisal. When performing an appraisal, the appraiser is looking for potential safety hazards or concerns. The buyer has determined in their purchase offer a dollar amount in which a seller is responsible to cover for bank required repairs. Some common bank required repairs include broken windows, peeling paint, missing electrical covers, missing handrails, and roofs that are in poor condition.

How does the inspection phase work?

Inspections are a common contingency that buyer’s make with purchase offers. There are many different types of inspections and tests that a buyer has the right to perform. Generally, all inspections are completed at the buyer’s expense. Typically, you have 15 days to complete all inspections and decide if you would like to continue with the purchase. If the seller, or more commonly the seller’s agent; shortens this time frame, you may want to consider why?

Who is responsible for making repairs that have been noted on a home inspection report?

The seller is not obligated to make any repairs. You may be able to negotiate a lower purchase price, if the seller does not want to make repairs. Your purchase contract should state you are buying the property “As-Is”, or specify an exact dollar or percentage amount that the seller is expected to pay, for repairs, wood destroying organism damage, and expenses related to building permits.

Should I include appliances or leave them as negotiable?

In most cases, the appliances stay with the home. It is the seller’s decision whether to include appliances or not. Appliances do not add much value to a home since appliances are considered personal property. The exceptions are washers, dryers, and freezers; these are typically not included or negotiable.

How do you plan on marketing my home?

A marketing plan is something that you should expect when selling your home. The internet has changed the real estate industry, a yard sign and a picture in a newspaper are no longer seen as effective marketing. It is critical that your home gets maximum exposure online. Your Realtor should have a great website, a real estate blog. Over 90% of buyer’s shop for a home online.

Why isn’t anyone looking at my home?

In most cases, it is due to the price. Buyer’s who feel a home is priced to high will choose to look at other homes, likely finding one before they reach yours. Other possible reasons could include poor curb appeal, a poor location, or not being marketed effectively.

How frequently and which method do you communicate with your home sellers?

At a bare minimum, you should expect to hear from your Realtor at least once a week when selling your home. You should let your realtor know how you prefer to communicate, phone, text or email.

Should I be present during showings at my home?

No, you will be wasting everyones time. There are many reasons why sellers should not be present during showings. The biggest reason is that a buyer will not feel comfortable going through your home. They will not talk freely or spend time looking around. The best idea is to leave shortly before the scheduled showing and come back once you are certain the buyer and their Realtor have left your home.

Will you be holding open houses?

Open houses are a controversial topic. Open houses are not necessary to sell a home. The primary reason a Realtor wants to have an open houses is to pick up additional buyer’s. Less than 5% of open house’s get buyer’s. The largest turn out at open houses are neighbors and window shoppers, not the buyer’s that you are looking for.

When is the closing date?

It’s important to understand that the closing date in the purchase offer is a target date. Before you hire the movers and take time off from work, know that the closing date in the contract isn’t necessarily the date you will sell your home. Many sellers will ask their Realtor this question, this is not the Realtors decision. The buyer’s lender and title company are the ones who have to set the closing date and time.

Do I need to do a final walk-through?

It’s not required, but it’s a very good idea. Final walk-throughs give buyers a chance to make sure nothing has changed since their last visit. Also, you can verify everything is in working order, as it was when your inspection was completed. If any repairs were requested, a follow-up visit ensures that everything was completed.

Frequently Asked Questions From Buyers

What is the first step in buying a home?

The first step is to get approved for a mortgage. Without being approved for a mortgage it will be difficult, to purchase a new home. If you are not pre-approved, there is a link on my website to a reputable, and trusted lender. You can access and complete a mortgage application there.

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

That depends on your funds and ability to find temporary housing. If you need more equity to purchase a new home, then it is best to sell your current home before purchasing the next one. You will most likely need temporary housing.

How many houses should I view before purchasing one?

The number of houses that you need to view can vary greatly. With all of the houses on the internet, it is much easier to narrow your search. Once you have a list of properties that you may be interested in, you can visit those homes to see if any will fit your needs.

How does earnest or escrow money work?

Earnest money is similar to a deposit when renting. It is made in good faith to demonstrate to the seller that the buyer’s offer is legitimate. Any amount is acceptable but must be agreed upon by the seller, and basically takes the property off the market, giving the buyer time to conduct an inspection and receive financing. At closing, that amount is credited toward the price of the property, causing you to pay that much less at closing.

How long does it take to buy a home?

From searching online to closing, can take anywhere from 2 – 12. If you are motivated and have cash you can probably close in 2 weeks. If you are taking your time and considering all possible homes, getting an FHA or USDA loan it can easily take 12 weeks. Once a home is selected and your offer is accepted, the average time to complete the escrow period on a home is 30 to 45 days.

Market conditions are a major factor in how fast homes are sold. In a sellers market with a lot of sales activity, buying a home may take a little longer than normal. That’s because several parties involved in the transaction get behind when business suddenly picks up. For example, a spike in home sales increases the demand for property appraisals and home inspections, yet there will be no increase in the number of appraisers and inspectors available to do the work. 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. In a buyer’s market when sales are slow no one is backed up and can keep the process moving quickly.

What is a mortgage and how does it work?

A mortgage is a bank loan to purchase property. Most people cannot purchase a house with cash. Thus, a mortgage serves as a secure loan that comes with an interest rate and gets paid off over time.

What is a loan commitment letter?

A loan commitment letter is given by the lender to the borrower stating the terms under which the lender has agreed to the loan. This is considered “loan approval” also.

What is mortgage insurance?

Mortgage insurance, also know as private mortgage insurance (PMI) is insurance to cover the lender. This is typically required on loans where the buyer is borrowing more than 80% of the value of the property.

What is mortgage life insurance?

Is an optional term life insurance for the amount of the loan on the home. This is paid for by the buyer, and will pay off the mortgage if the owner dies.

What are prepayment penalties?

A fee charged to a borrower for paying off a mortgage early, allowing the lender to still make money off the loan. Most loans today do not have prepayment penalties, it is still advisable to ask before signing for a loan.

What is RESPA?

RESPA is the Real Estate Settlement Procedures Act. It requires that the lender disclose certain information about the loan, including closing costs and annual percentage rate to the borrower. This information must be given to the borrower no later than 3 days after submission of the loan application.

What is DTI?

DTI stands for debt to income ratio. This is the amount that you can comfortably spend on housing each month, and how much money you have available for monthly bills. Both figures are very important to your lender when calculating your mortgage payments.

How Does My Credit Score Impact My Home Loan?

When determining how much home you can afford, your lender will look at your credit score. Typically, you need a score of 580 or higher to qualify, above 620 is better. A higher your credit score will allow you to have a smaller down payment, and a lower interest rate.

What is a seller’s market?

In a sellers’ market, there is an increased demand for homes, driving prices up. There are usually fewer houses on the market, and homes sell quickly.

What is a buyer’s market?

A buyer’s market exhibits declining home demand, with many homes for sale. Houses sit on the market for a long time, sellers reduce the price to entice buyers.

What is a stratified market?

A stratified market happens where supply and demand characteristics differ by home prices, in the same area. For example, home sales for properties above $500,000 may be brisk (seller’s market) while homes under $200,000 may be slow (buyer’s market).

How much do you charge to help me buy a house?

Home shoppers pay no fees to an agent to buy a home. For most home sales, there are two real estate agents involved: one that represents the seller and one represents the buyer.
Listing agents represent sellers and charge a fee to sell their property.
Buyer’s agents represent buyers and are compensated by the listing agent for finding a buyer. When the home is sold, the listing broker splits the listing fee with the buyer’s agent. Therefore, buyers don’t pay their agents.

Why can’t I pay my own insurance and taxes?

When your loan is originated, the mortgage documents will specify the escrow conditions. Some conventional loans waive the collection of escrow requirements is the borrower has a minimum of 20% equity in the property.

Do I have to pay private mortgage insurance (PMI)?

If you have 20% equity in your property, you may not have to pay private mortgage insurance. You can put 20% down to gain the equity needed, or obtain a second loan for the 20% needed.

How is interest calculated on my mortgage?

Your lender will calculate your interest monthly. They take the outstanding loan amount, at the end of the month and multiply it by your interest rate. Then divide that amount by 12.

Is there a minimum credit score that I need to obtain a mortgage loan?

That depends on the type of mortgage you are applying for. Overall, you probably won’t qualify for a mortgage with less than a 580 credit score. There are exceptions, some lenders do allow a credit score of 580.

What benefits do I receive from private mortgage insurance (PMI)?

Before PMI, borrowers were required to put down 20% of the purchase price. Now, with PMI, you can purchase a home with little money down.

What is underwriting?

The process of evaluating a loan to determine whether the loan is a good risk.

What is PITI?

The total monthly payment that you make on a house this amount includes Principal, Interest, Taxes, and Insurance.

What is a lock in?

A lock in is a guarantee of a certain interest rate for a certain period of time.

What is a gift letter?

A gift letter is when an individual gives you money for a down payment as a gift, that person must write you a gift letter so that it can be included in your loan documentation.

What is an origination fee?

A fee that some lenders charge to cover some of the cost of making the loan. This fee is typically 1% or lower and may. Be influenced by the type of loan.

What is an ARM loan?

An adjustable rate mortgage loan. The interest rate is adjusted periodically based on the terms of the mortgage documents. The interest rate is typically based on a common index published periodically, adjusted by a margin. The margin is an amount charged in addition to the index and typically does not change over the life of a loan.

What is an escrow account?

When borrowers make their monthly mortgage payments, they generally also pay 1/12 of the annual tax and insurance premium. These additional funds are deposited into an escrow account until the lender pays the tax and insurance premium when they are due. This guarantees that the borrower is paying the taxes and insurance.

What does prepaid interest mean?

Prepaid interest is typically paid at closing. It is the interest paid on a new loan from the day of closing through the end of the month. From then on your monthly payment will include last months interest.

Should I pay discount points to lower my interest rate?

Buying down the interest rate (paying points) is optional, and it will give you a lower interest rate. You will have to decide if paying up front or paying monthly is the better choice for you. If you have cash at closing and you plan to live in the house for a long time, that may be a better option for you. If you are short on cash at closing, are able to pay a higher payment due to higher interest, and don’t plan on staying in the house for an extended period; it may be wiser not to buy down your mortgage.

What should my credit score be to buy a house?

Most loan programs require a FICO score of 620 or better. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower down payment and a lower interest rate. Home buyer’s with lower credit scores may need to put more money down and have a higher interest rate, to offset the lender’s risk.

How much do I need for a down payment?

That depends on your financial situation, and they type of loan you are getting. First time homebuyers usually only put down 3 to 5% on a home. Some programs require zero down.

Conventional loans use to require 3-20% down payment. Some conventional loans are available with 3% down if the borrower carries private mortgage insurance (PMI).

Should I talk with a bank before looking at homes?

Yes, your need to be pre-approved for a loan, you need to know what price range of homes to consider, if you are a first time home buyer, a lender can guide you toward down payment assistance. Your lender can also explain what costs are associated with buying a homes, and explain the best type of loan for your particular situation.

Should I buy or continue to rent?

Buying a home can be a very good investment. Renting can be a better option for some. In many cases it can be cheaper to pay a mortgage than paying rent.

There are questions that you should ask yourself before deciding to buy a home. How long you plan on staying in a home, if you were to purchase. If the answer is only a few years, it is a better decision to continue renting. Another consideration is whether you are ready to take on the additional responsibilities of owning a home. When owning a home there will be general home maintenance that should be done, are you ready for that?

Do I really need a Realtor when buying a home?

When buying a home, it’s strongly recommended you have a Realtor. Keep in mind, all Realtors are not the same!

When buying a home you do not pay any realtor fees. Having the benefit of a knowledgeable and experienced person, at no cost to you; there is no reason not to have a realtor.

Who pays the Realtor fees when buying a home?

Home shoppers pay no fees to an agent to buy a home. For most home sales, there are two real estate agents involved: one that represents the seller and one represents the buyer.

Listing agents represent sellers and charge a fee to sell their property.

Buyer’s agents represent buyers and are compensated by the listing agent for finding a buyer. When the home is sold, the listing broker splits the listing fee with the buyer’s agent. Therefore, buyers don’t pay their agents.

What does a realtor do?

A realtor is your most valuable asset when buying a home. They are the person that will guide you through the entire process. It is the realtor’s job to make sure that you are fully informed of what is taking place from start to finish.
Any problems that arise or any questions that you have, your realtor should always be there for you. Their job is to take care of you, don’t be afraid to contact them for anything that you need.

What is the MLS?

MLS stands for multiple listing service. It is a network of real estate listings for buyers to search for available properties. They are typically run by local real estate associations, providing photos and property details.

What does DOM?

DOM stands for days on market. This allows buyers to see how long a property has been for sale and, how motivated the seller might be.

What does pre-approved mean?

When a borrower gives a lender all of their personal and financial information. The lender verifies all information and then gives the borrower a letter stating how much the borrower has been approved for, and the terms of the loan.
Once you have chosen a house to purchase you will need to submit that information to the lander so that they can approve your loan for that specific property.

What does pre-qualified mean?

When a borrower gives a lender their basic financial information. The lender gives the borrower an estimate of how much they might be qualified to borrow.

What is the difference in pre-qualified and pre-approved?

Pre-qualified states you might be able to borrow money. Pre-approved states the bank has agreed to give you the money.

What home can I afford?

That depends on your income and financial obligations. Meet with a lender to get pre-approved, they will give you an exact amount.

How much money can I barrow for my house?

Generally, the amount that the borrowers make before taxes multiplied by 2.25%. If you have a large down payment and no debt, you may qualify for a larger amount.

How is a real estate agent different from a real estate broker?

A real estate agent is someone who is licensed to arrange real estate transactions. A real estate broker is someone who is licensed to arrange real estate transactions and is authorized to open and run a real estate agency.

What is a Realtor?

A realtor is a real estate agent or a real estate broker who is a member to the National Association of Realtors.

How Do I Search for a Home?

After you have been pre-approved for a mortgage, let your realtor know what price range, and home features you are looking for. Your realtor should send you what is available that might meet your needs. Narrow down the results to those that meet your criteria. Ask your realtor to schedule showings for those homes. Look at each home carefully to determine if that is the home for you.

How Much Do Real Estate Agents Charge?

Typically, Realtors charge the seller 6% commission for selling their house. That agent then pays the buyer’s real estate agent 3% for bringing the buyer.

What do you think the seller will accept as a fair price?

Offering 5% below the listing price, you won’t offend anyone. If it’s been sitting on the market for months, you could offer 10% below the asking price. You never know what the seller’s bottom line is. Everyone’s situation is different and their motivations are as well. If the sellers are ready to move, you could get a good deal. If the sellers are holding out for the listing price, you may not be able to get it for less.

How do I know if the property is a good deal?

The best way is to check out what similar houses are selling for in that neighborhood. If the listing price is lower, it may be a good deal. Always get a home inspection. If there are no major issues, it may be a good deal.

How long can the seller take to respond to my offer?

Written offers should stipulate the timeframe in which the seller should respond. Twenty-four hours is sufficient time. With todays technology, there should be little delay in getting your offer to the seller quickly.

What if my offer is rejected?

Sellers have the right to accept or reject any offer. They can also send back a counteroffer. As long as you get a counteroffer you are still in negotiations. You should consider the counteroffer carefully. If you approve it closes the deal immediately. Counteroffers can go back-and-forth many times. Each revision should bring both parties closer together on the terms of the deal.

What is a counter offer?

An offer made by one party that makes changes to the previous offer of the other party.

How much should I offer the sellers?

When buying a home, you are the one that has to determine how much you should offer a seller. The listing agent should have completed a comparative market analysis (CMA), and priced the property at market value. You should ask for your Realtor for advice, he or she should have done a CMA as well, and can tell you the market value. Ultimately, you are the only person who can determine what the home is worth to you.

When can I back out if I change my mind?

You can always back out of a deal, doing so without good reason may forfeit your earnest money.

When do I have to deposit the escrow money?

Generally you have 3 days after the seller accepts your offer to deposit your escrow funds with the title company.

Should I order a home inspection?

Yes, a home inspection is one of the most important steps in purchasing a home. Home inspections are required if you plan on financing your home with an FHA, VA, or USDA loan. Other mortgage programs do not require inspections. Home inspections are always recommended, they can reveal defects in the home that are not easily detected. Home inspections can bring peace of mind to one of your biggest investments.

What happens if I decide to back out of buying a house?

If you get cold feet about a property that is okay. Sometimes, you might have second thoughts or want to go in a different direction. Just remember that you might have to forfeit your escrow money.

Can I find a rent-to-own property?

Yes, you can, but the likelihood is low. The hard part is finding an owner who would consider that option. Buyers who rent to own have low credit scores, making them a higher risk. This often leads to less than favorable terms for a buyer. When looking at a rent-to-own as an option you can expect to provide a considerable amount of money down and a higher interest rate than what a lender will offer. If you are able to purchase a home through a lender, you will be better off because the terms will be more favorable.

Can I find an owner-financing property?

Yes, you can, but the terms are usually unfavorable. Buyers who seek owner-financing have low credit scores, making them a higher risk. This often leads to less than favorable terms for a buyer. When looking at owner-financing as an option you can expect to pay up $20,000 and around 10% interest. If you are able to purchase a home through a lender, you will be better off because the terms will be more favorable.

What is a short sale?

A short sale, is the sale of a home in which the proceeds from the sale are less than what is owed on the property. Unfortunately, the home owner is unable to pay the loan in full. Before considering purchasing a short sale, you should consider things such as the time it can take for a short sale response, and the fact that a foreclosure is still possible. Many short sale properties are in poor condition and it is harder to obtain financing on them. Short sales are not impossible to buy, but you must be patient and be in no rush to buy.

What is a foreclosure?

A foreclosure, sometimes referred to as a REO, or bank owned. It was purchased by an individual who did not pay the mortgage as agreed, and the bank has taken possession of the property. If you’re considering the purchase of a foreclosure, it’s important to understand that most are sold “as-is.” Foreclosures, are often purchased by investors, fixed up, and sold to again.

Foreclosures can actually be a smoother transaction than a short sale.

What are the differences in a Trailer, Mobile Home, Manufactured Home, and a Modular Home?

Many people commonly use “trailer” or “mobile home” to refer to today’s modern manufactured or modular homes. However, trailers, mobile homes and manufactured homes were distinguished from each other in 1974 when the National Mobile Home Construction and Safety Act was passed. This act was followed in 1976 by the HUD code, which gives federal standards for manufactured homes.

After the HUD Code was created in 1976, the Housing Act of 1980 later mandated the term “manufactured” be used in place of “mobile” in all federal laws and literature that referenced homes built after 1976. The new codes and standards then quickly gave rise to the new era of the modern manufactured homes you see today.

What is a Manufactured Home?

When it comes to comparing manufactured and modular homes, one factor that can set them apart along with the codes each are built to is the type of foundation typically used for each.
If your manufactured home has a pier and beam foundation, it can usually be relocated by a contractor who specializes in manufactured homes. Depending on factors like where the home will be located, manufactured homes can also be placed on a permanent foundation, crawl space or basement.

What is a Modular Home?

Like manufactured homes, modular homes are constructed inside building facilities and then transported to the home site. The main difference between manufactured and modular homes is that manufactured homes are built to the national HUD code, while modular homes are built to all applicable state and local building codes. This is similar to the way traditional site-built homes are constructed.

How is the neighborhood/area?

When buying a home, buyers often ask questions regarding the neighborhood. As a real estate professional, there are rules against steering and providing personal opinions into specific areas and neighborhoods. It is recommended that you do your due diligence when considering a neighborhood. Drive through at different times of the day, and different days of the week. Check area crime reports, talk to neighbors, and look at how well kept the homes are in the area.

How are the schools?

When buying a home, buyers often ask questions regarding the schools. As a real estate professional, there are rules against steering and providing personal opinions into specific schools. Look at the schools websites, there you can find information so that you can determine whether or not the schools are acceptable to you or not. Talk with other parents in the neighborhood and ask their opinion of the schools.

What are the average utility bills?

When buying a home, it’s important to know what additional costs there will be in addition to the monthly mortgage payment. Utility bills are just one of the additional costs to consider when buying a home. Utility bills can be obtained from the home owner and in some cases, from the local utility company, who can provide averages over the past 12 months. Keep in mind, everyone prefers to have their home temperature different, so the average bill could be different if you were to purchase the home.

What’s the age of the roof or air conditioner?

When looking at homes, many buyers want to know the ages of specific items in a home. The most popular items in a home that buyers want to know about are the major mechanical items, such as the roof, and air conditioner. You can get the serial number off of the air conditioner and do an internet search to find out the model year. The age of the roof should be known by the home owner. The County may have a recent roofing permit. If not, the age can be estimated by your home inspector. The older the roof, the sooner your homeowner’s iInsurance Company will demand that you replace the roof.

What’s the next step?

• Get pre-approved for a mortgage.
• Look for homes in your price range.
• Narrow the list and visit those homes.
• Decide which home you want to make an offer on.
• Submit an offer to purchase.
• Wait patiently.
• Your offer was accepted.
• Notify your lender and complete a mortgage application for that property.
• This is your due diligence period, be sure to take advantage of this time.
• Make your earnest/escrow deposit.
• Schedule inspections.
• Go to Inspections.
• Decide if this home for you.
• Wait for the lender to advise you of what they need.
• Your lender and title company will take care of the title, appraisal and the survey.
• Your lender will notify you of your loan approval.
• Be sure to have utilities ready to be transferred into your name on closing day.
• Be sure to have a Homeowner’s Insurance policy ready to take effect on closing day. (Insurance companies will not write policies if there is a threat of a storm, be sure to take care of this ahead of time. Your lender will not allow you to close without a homeowner’s insurance policy.)
• Your lender will give you a settlement statement 3 days prior to closing. This will have all of the financial information for the transaction.
• Obtain a cashiers check for the amount due at closing.
• Do a final walk through.
• Go to closing!

How can I build equity in my home?

There are 3 ways to build equity. The easiest is market appreciation, you don’t have to do anything, just wait for the value to go up. When making monthly payments, try to send extra. If you can’t do that, try to send one extra payment each year. That amount goes directly to principal rather than toward interest. Make improvements to your home. Update the kitchen and bathrooms, add square footage.

How big is an acre?

An acre of land is 43,560 square feet. About the size of a football field, without the end zones.

What is included in a homes square footage?
This area includes the “heated space”, or “livable space”. Garages, unfinished basements and attics, and porches are not included in this number.

What are the Buyer’s closing costs?

There are expenses that the buyer will have when buying a home. Typical closing expenses for the buyer include the mortgage fees, appraisal, survey, recording fees, homeowners insurance, and some miscellaneous fees.

What are contingencies?

Think of them as agreements between the seller and the buyer. A contingency allow the buyer or seller to void the contract if certain items aren’t met. Some common contingencies are appraisal, inspection, sale of house, and loan approval contingencies.

What is Title Insurance?

Title Insurance insures you that you are getting a clear title to the property, without any liens or encumbrances.

What are comparables or “comps”?

A word used by appraisers and realtors when determining fair market value of a property. A “comp” is a recently sold property that is similar in size, location, and amenities to another home.

What is homeowner’s insurance?

Homeowner’s insurance cover you against losses. Lenders usually require you to have homeowners insurance equal to the amount of the loan.

What is a home warranty?

An insurance policy that is purchased at the time you purchase your home. It covers the major systems, appliances, and other items in your home. It is not homeowner’s insurance.

What is an appraisal?

An estimate of the value of a piece of property by a licensed appraiser. It lets the lender know how much to loan for the property.

What is a closing?

It is the final step in the purchase of property. The act of transferring the title and deed from the seller to the buyer.

What are covenants?

Covenants or CC&R (covenants, conditions & restrictions) are deed restrictions.

What home improvement projects will increase the value of my home?

The three best ways to add value to your home is to update the kitchen and bathrooms, and add square footage to your home.

What is a home inspection?

A limited non-invasive examination of the condition of a home, prior to purchase. Home inspections are typically done by licensed home inspectors. After the inspection you will receive a report detailing the condition of the foundation, structural components, roof, HVAC, plumbing and electrical systems, appliance, and more. Depending on the size of the home, a home inspection takes about 2-4 hours.

Can I buy a home and sell my current one at the same time?

Yes, but it is difficult to close on the house that you are selling and the house that you are buying on the same day. It will be easier and less stressful if you sell before you buy, you might need to rent until finding a new place.

There are ways to do both at once, and one option is to instate a “sale contingency” in your contract. This means you only agree to buy a home if you can sell the one you’re in. The downside is that the seller may not agree.

How quickly can I close?

Typical closing time is 30 to 45 days depending on the type of financing you will be getting.

What Home Service Companies Are Available?

There is a list of professionals and service providers on my website that can help you with most home related services.

What Should My Down Payment Be?

That will depend on several things; the type of loan, your credit history, the type of property, and other factors. Some loans have 0 down payment, while others are 3% and up.

Will my home depreciate in value?

Generally, real property doesn’t depreciate in value. That is why real estate makes a good investment. Be sure to consider location when buying a home, it can greatly effect your homes future value.

What does FSBO mean?

For Sale By Owner, this usually indicates that is being sold without a real estate agent. If you buy a home that is being sold by owner, be sure to do your due diligence.

What is an HOA?

Home Owners Association is a non profit association that manages common areas of condominiums and developments. Owners pay a fee to the association to maintain the swimming pool, club house, and other common areas.

How long will signing at closing take?

Plan on spending 30-45 minutes at closing, the less complex your purchase is, the sooner you will be finished.

Do all of the appliances come with the house?

Typically the stove, refrigerator, and dishwasher, remain with the house along with the microwave, if it is built in. You can always request in the offer that the seller leave the washer, dryer, and freezer; if you would like those items to remain as well.

How much money do I need to bring to closing?

Your lender or the title company will give you an exact amount that you will need to bring to closing a few days before closing.

Will I need flood insurance?

If your house is located in a designated flood zone your lender will most likely require you to have flood insurance. If you don’t have a mortgage, flood insurance is not a requirement.

What is a survey?

A survey confirms a properties boundary lines and legal description. Your lender will require this before you purchase your property.

What is “AS-IS”?

When buying property “AS-IS”, the homeowner is selling the property in its current condition and will not make any repairs, improvements, or provide a credit for improvements. This also releases the seller from any responsibility or liability for the property condition.

What is lead-based paint?

It was a type of house paint used prior to 1980. The paint contained lead to accelerate the drying process, maintain durability, and add moisture resistance to the paint. Unfortunately, children were eating the paint and the lead caused brain and organ damage.
Today, house paint does not contain lead, although houses built before 1980 may still contain lead-based paint.

Why do I need a clear title?

When a lender makes a mortgage loan, the lender requires a first lien position. Meaning that there can be no other outstanding liens against the property that are superior to the new mortgage. It is important that the buyer receives a clear title from the seller so that there are no future claims against their property ownership rights.

When is the closing date?

It’s important to understand that the closing date in the purchase offer is a target date. Before you hire the movers and take time off from work, know that the closing date in the contract isn’t necessarily the date you will own your new home. Many buyers will ask their Realtor this question, this is not the Realtors decision. The lender and title company are the ones who have to set the closing date and time.

Should I do a final walk-through?

A final walk-through is highly recommended. Final walk-throughs give you a chance to make sure nothing has changed since your initial inspection. Also, any repairs that were requested as part of the sale offer, a follow-up visit ensures all repairs have been completed.