Frequently Asked Questions
1. What the first step of the home buying process?
Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender get the ball rolling in the right direction.
First, you need to know how much you can borrow. Knowing how much home you can afford narrows down online home searching to suitable properties, thus no time is wasted considering homes that are not within your budget. (Pre-approvals also help prevent disappointment caused by falling in love unaffordable homes.)
Second, the loan estimate from your lender will show how much money is required for the down payment and closing costs. You may need more time to save up money, liquidate other assets or seek mortgage gift funds from family. In any case, you will have a clear picture of what is financially required.
Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to both your real estate agent and the person selling their home.
Most real estate agents will require a pre-approval before showing homes – this is especially true at the higher end of the real estate market; sellers of luxury homes will only allow pre-screened (and verified) buyers to view their homes. This is meant to keep out “Looky Lous” and protect the seller’s privacy. What’s more, by limiting who enters their home, sellers are given extra security from potential thieves trying to case the home (like identifying security systems, locating expensive artwork or other high-value personal property).
2. How long does it take to buy a home?
From start (searching online) to finish (closing escrow), buying a home takes about 10 to 12 weeks. Once a home is selected an the offer is accepted, the average time to complete the escrow period on a home is 30 to 45 days (under normal market conditions). Though, well-prepared home buyers who pay cash have been known to purchase properties faster than that.
Market conditions are a major factor in how fast homes are sold. In hot markets 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.
3. What is a seller’s market?
In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:
- Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
- Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first time home buyers who can afford bigger homes as the cost of money goes lower.
- A short-term spike in interest rates – may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded.
- Low inventory – fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.
4. Should I buy or continue to rent?
5. I own a home, should I buy another before selling my current home?
There is no right or wrong answer to this question, because there are pros and cons to both options. Buying a home before selling your current home is certainly the easiest method. It avoids lining up the closing dates perfectly, and allows you to take your time in selling the home. However it does potentially require more cash. You need to either be able to make two house payments for a period of time, or pay a high enough amount on the new home to convince them to accept a contract subject to the sale of your home.
6. Do I really need a Realtor when buying a home?
7. Who pays the Realtor fees when buying a home?
In almost every case (over 97%), the seller pays the full Realtor fees for the buyers realtor.
8. How is the neighborhood/area?
This is why it is important to use a Realtor with strong experience and knowledge of the specific areas you are interested in. We can answer your questions about growth of the local economy, crime statistics, taxes, and local amenities. Your Realtor should be able to provide all pertinent information to allow you to make an educated decision on areas and neighborhoods.
9. How are the schools?
Just like tips for selecting a neighborhood, a top Realtor will be familiar with the school, know the principals, and can set up meetings for you to be able to get the information you need to evaluate the various school options.
10. How many homes should I look at before putting in a purchase offer?
We begin your search with an in depth interview about what you are looking for in a home. There is no hard and fast rule to this question, but from the interview, we are very often able to narrow it down to just a hand full of houses to find you an ideal home.