1. What can I afford?
Unless you’re paying cash, the sticker price of a house is not the actual amount you’ll pay. And even if you are paying cash, there will be ongoing costs you should consider. To determine the real cost of buying a home, factor in your down payment, estimated closing costs, as well as your monthly mortgage payment, insurance and taxes. Be sure to ask yourself your long-term plans, how long you plan on living there. The answer may help you decide what kind of mortgage you take. Consult credible lenders and get pre-approved so you know your home-buying budget.
2. What do I do once I’m pre-approved?
You’ll need someone to show you houses!
3. What kind of real estate professional is best?
Real estate professionals go by a wide variety of names, which can be confusing. A REALTOR® refers to someone who is a licensed real estate salesperson who belongs to the trade group National Association of REALTORS®. An Exclusive Buyer’s Agent is a real estate professional who is legally licensed to represent you, your interests in your real estate transactions, see you through from start to finish, and make sure you are getting the best deal possible. Conversely, a real estate agent who doesn’t specifically identify as an exclusive buyer’s agent will often have the best interest of their firm and the sellers whose listings their firm holds in mind, so you may run the risk of receiving fewer objective property recommendations and paying a premium.
4. How long does it take to buy a home?
On average, 30 to 45 days. Once you have found your dream home and your offer has been accepted, you will enter the escrow period. This is a mutually agreed upon period of time for the buyer and seller to perform all of the detail work in the sales contract, and for the title company to close on the property.
5. Do I need an inspection?
Yes. Home inspectors are experts at unveiling problems with the home, which are often not pointed out by the seller, or items not easily assessed like septic, electrical and heating systems. Make sure to save a copy of the inspection report so that you can refer back to it if problems crop up after move-in.
6. Do I need a house survey and an appraisal?
Conducting a survey of the home provides a permanent record of property lines and helps verify the existing physical boundaries of the property. An appraisal simply determines the market value, typically a condition of a loan approval that the property must appraise for purchase price or better.
7. Can I buy a home and sell my current one at the same time?
Yes, but it may get complicated. If you buy a home before you sell the one you’re in, you may be overextended financially. If you sell before you buy, you might need to rent before finding a new place. An option is to include a sale contingency in your contract. This means you only agree to buy a home if you can sell the one you’re in.
8. How do I know if the property I love is a good deal?
Before you make an offer, you’ll want to check out comps—what similar properties are selling for in the area—and whether those prices have been going up or down in the recent past. You’ll also want to find out the history of the home, and be sure you like the neighborhood.
9. What’s included in the sale?
Before buying a house, find out what the sellers will be taking, such as window treatments, appliances, and light fixtures. Be sure to get the answers in writing.
10. When can I back out if I change my mind?
You can always back out of a deal, but doing so without good reason may forfeit your earnest money, the cash put down to secure the offer, typically around 1%-2% of the home’s price. It’s a good idea to include contingencies such as “subject to appraisal” or “satisfactory home inspection,” to ensure you can back out if the lender for your loan doesn’t think the property is worth what you offered.