What inspection items do I “have” to address?
You get to chose what issues you wish to address from the inspection report. As real estate agents we strongly recommend to all our clients that they not only have an inspection, they additionally make the offer contingent upon the inspection. It’s always best to be safe rather than sorry when making such a large purchase, look over all the inspection options and chose the one that covers all your bases. Inspections are a vital step in the process of home buying that each home buyer should understand. Look for our upcoming blog on what both the buyer and seller have to address during the inspection period.
What happens if the appraisal comes back below the purchase price?
When your home appraises for less than its purchase price, there are a few options available:
- Buyer and seller renegotiate a new, lower home sale price
- Buyer increases down payment to meet new LTV (loan-to-value) and down payment minimums
- Buyer chooses neither option, and walks away
- Request an appraisal rebuttal (see below)
The possibility of a “bad appraisal” “or simply missed comparable properties and property features are among the reasons why home purchase contracts are often written with an appraisal contingency. Should the home fail to appraise for its contracted purchase price, the contingency clause allows buyers to re-evaluate and, potentially, walk away.
What is a “normal” closing cost figure to ask for?
The closing costs will vary, your real estate agent can give you an estimate for a starting point on these costs such as title policy and inspection costs. To get the finalized figure you would want to speak with your chosen lender. They are the experts in this field and will have the most informed figures. Your agent should be able to provide a list of available lender resources to review as you search for the best fit.
Why do I need a realtor?
All the details involved in the home buying process can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much simpler. A real estate broker will be well-acquainted with all the important things you’ll want to know about an area/neighborhood you may be considering including: the quality of schools, traffic volume, neighborhood value trends, restaurants & highway access. He or she will help you figure the price range you can afford and search the classified ads and multiple listing services for homes you’ll want to see. With immediate access to homes as soon as they’re put on the market, the broker can save you hours of wasted time. When it’s time to make an offer, the broker can point out ways to structure your contract. He or she will explain the advantages and disadvantages, guide you through the paperwork, and be there to hold your hand and answer last-minute questions throughout the closing process. You can think of your real estate agent as a quarterback – keeping everyone involved on the same page and communicating with the multiple moving parts of the home buying machine for each client’s individual needs.
What is title insurance?
Title insurance is protection against loss arising from problems connected to the title to your property. Before you purchased your home, it may have gone through many ownership changes. There may be a weak link at any point in that chain that could emerge to cause trouble. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.
How do I know if I can get a loan?
Step one should be going to a lender, getting pre-approved for a mortgage before you actually start looking for a home. Then you’ll know exactly how much you can afford to spend, and it will speed the process once you do find the home of your dreams. If you already have an agent you can ask them to refer a few lenders to compare and choice from.
In addition to the mortgage payment, what other costs do I need to consider?
Each property will vary, for example you might have homeowner association or condo association dues. You’ll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment, called an escrow account. Your broker will be able to help you anticipate these costs, another positive reason to work with a broker to assess all factors.
So what will my mortgage cover?
Most loans will have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you’ve borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year.
How quickly can I close?
Typically it takes 30-45 days to get from the accepted offer to the closing table, this gives you enough time to do the investigation on the property and get a loan completed. Due diligence is required of all parties to make sure all the proper boxes are checked.
When can I back out if I change my mind?
While buyers can back out a deal, doing so without reason may result in the forfeit of their earnest money (typically 1-2% of the purchase price). There are some ways to walk away with your earnest money, contingencies allow the buyer to walk away if certain criteria aren’t met such as the sale of their existing home, securing financing and inspection results.
What are some other questions that didn’t make the list? Be sure to check out our Real Estate ABC’s for more useful terms and tips.