Buying a home can be intimidating. There is so much to learn, and there are many questions that you need answered before making the leap. This often leaves buyers feeling lost or overwhelmed.
Fortunately, with the right information, most people can feel confident in their purchase decision by asking these ten common buyer questions and receiving clarification on them from industry experts.
Q: What is the difference between a REALTOR and a Real Estate Agent?
A: A real estate agent is an experienced licensed professional who can represent both parties in a transaction and is compensated on commission. They are also licensed by the state they operate in. Some are also called brokers. Brokers are the ones who actually represent the client where agents act on behalf of the broker their license is associated with. Some Agents only represent the buyer exclusively and some only represent sellers. They are also there to guide you along the way, provide advice when it comes to negotiations, mortgage rates, and title insurance.
A REALTOR provides much of the same services, but is different in that they are committed to and held to a standard of ethics. They provide their services to buyers and sellers and typically are compensated by the Listing Agent who has an agreement with the seller. Many agents choose to use the term agent instead of broker or REALTOR because it makes them more easily identified as an expert on the subject matter.
Q: Do I really need a REALTOR when buying a home?
A: Yes, you can buy your home without a REALTOR but there are risks involved. A private sale means that you would need to do all the work of finding the right property and getting yourself pre-approved for a mortgage before contacting a seller, who will also do all the work on their end on their own. Nervous sellers sometimes list their home with a real estate agent first, or require that the buyer be represented by one.
Having a REALTOR will help you find the right property, figure out what your financial situation is and work through it to see if buying this house is possible for you. They'll be able to guide you through the home-buying process all the way to transferring the title in your name.
Q: Should I talk with a bank before looking at homes?
A: When you are looking to buy a home, one of the first steps is to find out what your financial situation is. This can be done by talking with a bank about how much money you have saved and what kind of mortgage interest rates they offer. You should also check with them about things like down payments and fees that may come up when purchasing a new home. Speaking with the bank before buying your dream house will help make sure that it is affordable for you.
Different banks offer different rates and may have slightly different requirements when it comes to mortgage interest rates. Checking with them first will help ensure that this new purchase fits into your budget without too much trouble. It doesn't hurt to shop around at banks or other mortgage lenders to find a place that will offer you the best rates.
Q: What are disclosures, and why would I need them?
A: Disclosures help ensure that both parties know what they're getting into from day one, which gives you a greater chance of reaching an agreement.
A seller disclosure is a list of information that the seller will be required to provide to the buyer. This includes any defects or problems with the home, as well as warranties and guarantees. Sellers are legally required to disclose this information, so buyers can make an informed decision about whether they want to purchase a property.
Buyer disclosures are also important because they set expectations for both parties involved in the transaction. If there's anything unusual or out-of-the-ordinary about your home you should disclose it before making an offer on a house - even if it's something small like not having central air conditioning installed when construction finished last year.
Q: Should I buy or continue to rent?
A: It is important to weigh the pros and the cons of buying a home or continuing to rent. The key factors are your income, credit score and down payment availability, as well as how much you plan on moving in the next five years. If you're renting because it's a temporary situation then renting is generally a better option than buying because once rented, most rental rates remain set for an agreed-upon time frame.
However, if you're looking for your Forever Home and opting to live in one place for a while, then purchasing may make more sense. Things to consider when deciding whether or not this makes the most financial sense are the mortgage interest rates, tax deductions, escrow fees, property taxes, insurance premiums and upkeep costs that you may have in a purchased home.
Q: How do I decide which home to choose?
A: Usually, you would want to start your search in an area that you like or is convenient for commuting. You do not have to be located near the town you work in but it may make it easier if you are since it will give you more opportunities as well as access to free transportation should the need arise. Then, think about other considerations like the age of the house and whether there are any repairs needed.
Before you begin the search process, consider these questions:
- What kind of property do I want?
- How much space do I need?
- Do I want to be in the city or out in the country?
- How much can I afford?
- How long do I plan on staying in the area?
Once you’ve answered them, you should have a decent idea of what area will be best to settle down and find your new home.
Q: Should I have a home inspection done?
A: The home that you are buying may be in need of repairs or have hidden defects. It is important to make sure the house you want is safe and structurally sound by getting it inspected before making an offer. A home inspection is the best way for a buyer to make sure that there are no unknown defects with their new home. Inspections can also be used to negotiate price or to get repairs done before purchasing, in order to lower your property purchase price, or as proof if you later decide to take legal action against the seller for not informing you of problems that were found during the inspection.
If an inspection offers poor results then it's important to consider how bad they are and what this means for your future decisions. If you're worried about these issues but would still like a house then try negotiating on repairs with the seller before buying it- even if those negotiations don't result in anything, at least you'll know where you stand when it comes to repairs and maintenance.
Q: How is the closing date determined?
A: Closing date is the day that the sale becomes final and legally binding. This is usually 2-3 weeks after the offer has been accepted by sellers. The length of time depends on how fast each party is able to do their part of closing, which includes paperwork, transferring funds from one account to another and other activities. At this point in time, once everything goes through, you get keys to your new property.
Q: What kind of insurance will I need?
A: The best way to protect your new home and belongings is by purchasing a property insurance policy to protect your home and belongings in case anything happens. However, it's important that you understand the different types of coverage available so that you can choose one that suits your needs. Insurance policies are rated on cost, deductibles and how much they cover for specific situations like fire or windstorms. You may even want to consider additional life insurance if someone in your family would need assistance with their finances should something happen to you.
You should also consider liability coverage so that you are protected financially if someone is injured while on your property or if something breaks and causes damage to another person's personal property. If you live in a home with a mortgage then you will probably have additional insurance called hazard insurance. This protects your lenders against damage that can put you at risk for defaulting on your loan.
Q: How much do I need to save for a downpayment?
A: Most sellers want to see a 20% down payment. This is so that it will be easier for you to make the monthly payments as well as any repairs and maintenance costs in the future. You also shouldn't need to worry about paying private mortgage insurance (PMI). If you make a down payment of less than 20%, the seller may ask for private mortgage insurance. This is an additional fee that pays the interest on your loan if you do not have enough money to cover it when the borrower's payments are late. The monthly PMI can add up over time, so it's best not to take this route unless absolutely necessary.
If you're looking to purchase a home in the near future, it's important that you do your research beforehand. There is plenty of useful information out there about topics like mortgages and financing options. Just be sure not to get overwhelmed by all the noise! It's normal for new homeowners to have questions throughout this exciting process.