I live in a rented place. Is it a good idea to buy a home?
It depends on your situation. Firstly, consider how long you will be staying at that place. If you plan to stay for a few years only then renting is a better option. Again, there would be an additional responsibility of maintaining the purchased home. Also, consider the ongoing rate of interest of FHA mortgage. Paying a low rate of interest is much more feasible than paying the rent.
Now, you got to consider all these aspects, analyze your circumstances and see which would be more convenient for you – owning a home or renting one.
I want to buy home. Do I need to talk to my bank before looking at homes?
Well, actually you should. Doing so will help you understand what you can afford, getting it pre-approved. It becomes mandatory if you are going to buy your first home. You must know what would be available to you. There are so many costs associated with buying a home, so many different technical terms and things (down payment, escrow, pre-paid items). You can even request for a seller's concession. Are you aware of that? Only a professional can guide and give you all the advice you really need!
How much should I be offering?
It is like the cat chasing the mouse game. If you offer too little, you may lose the house to someone else. Again offering too high, will make you overpay. For this reason, you should be seeing a real estate agent who would compare the property with the other houses recently sold in that area. He would even run a check on the property to evaluate its true value – this will help you offer right. See how much time the sellers need to respond to you and prepare a counter offer that suits your resources. First thing first, consult a real estate professional.
Should I sell the home I own before buying a new one?
There are two scenarios. First, you buy one before you sell your owned home. Second, you sell your home then buy one. Well, there are some consequences to both the scenarios. Purchasing it before reduces your stress to find a home. Again, it doesn't sell timely then would cause more problem. Biggest risk of selling your home beforehand is that you may not find a nice place to live in. However, there won't be any sale contingency so you would be in a better position to negotiate. There is also rent-back policy that allows the sellers to have possession of the place even after the closing of the deal.
Who should be paying the Realtor fee?
Most of the property buyers do ask questions regarding the necessity of Realtor. The main reason for asking so is that they are not sure who would be paying the realtor's fee. Well, there is no surety, but as seen in most of the cases, sellers do pay it.
How can I be sure that I am ready to own a house?
Make an inventory of all your assets, debts and lifestyle. People and organizations prefer to lend money to those who can pay their debts on time. To get qualified for that, you need to have a constant source of good income.
Also, you have to pay at least 5 to 10% of the property's purchase value as a down payment. Did you save enough for the down payment? You should be having fair to good credit score with no or few easy-to-settle outstanding debts and a solid track record of payments made on time.
If you have it all, you are ready for buying home.
How to decide if the community is suitable for me to live in?
It is all about your future. In case you have a new family or planning one then find a community that has a high percentage of families with some kid-friendly activity centers around like good schools, parks, pools, etc.
Other factors include how far you need to commute to work. If you don't have a vehicle, what the public transport options available there. Do you find them suitable? Finally, consider having a supermarket or restaurant nearby because it seriously saves you money.
Share your future plans and check these mentioned factors with the real estate agent so that he can search appropriate homes that will suit you.
How many houses should I look at before making an offer?
To be honest, there is no specific number of that. Some people take months to find a home while there are also a few who find one within a few hours. It varies from one person to another. You don't have to purchase the first house you see. If you think so, you're making mistake.
Restructure the house-hunting process, make a checklist of all the things that you are looking for and accordingly narrow down the options available. It will be easier and less time-consuming for you!
What should I do if the seller discards my offer?
The offer you give to the seller for purchasing the home is called purchase offer that can possibly have 4 kinds of responses:
b. Counter offer placed.
c. Offer rejected
d. Offer not responded.
If the seller rejects your offer without placing a counteroffer, then you have the right to place another proposition. It is rare that an offer is discarded or not answered unless the seller is affronted by an unrealistically low offer.
I have changed my mind. When can I withdraw?
Buyers can opt out of deal whenever they want, but doing so without giving a good reason can lead to the loss of the paid earnest money. It is the amount that the interested buyer pay to lock the offer. It generally ranges from around 1 to 2% of the house's evaluate price.
Well, that doesn't mean you cannot back out with your earnest money. There are two great loopholes – contingency and subject to appraisal. Suppose, the home inspection conducted gives unsatisfactory feedback. Your loan lender doesn't find the house worth the amount you have offered. Under such scenario, you can ask for your deposit money.
Is a home inspection that necessary?
Yes, of course. As any realtor. A home inspector is a professional who takes all pressure off your shoulder. He checks the condition of the entire house, from the electricity, heating, air, plumbing, flooring to the roof. It saves you from paying all the future repair works. If you could identify a problem, you would be able to negotiate with the seller and get it repaired before completing the paperwork.
Apart from the community, what things or questions I should ask when buying home?
Buying a home is a big decision as you are going to live in there several years for the rest of your life. With time your family will also grow. Is it large enough to fit your growing family and your needs – both today and in coming future? How is the structure of the house? Imagine how the house will be throughout the year with your things? Ask the present homeowner questions which bother you.
Will the appliances will stay if there is some maintenance issue or how is the neighborhood; there're so many questions. Just don't hesitate to ask or it will incur your expenses.
What do you mean by home warranty? Do I need it?
A home warranty is very useful for the first-time buyers. It gives a coverage on specific items like appliances for a certain period of time like a year at least. During this time, the buyers might have restricted finances and there is an unexpected requirement for repair or replacement that this warranty comes handy.
Whether you need to invest in a home warranty or not is up to you. You know how your finances would be and what benefits you will get. You can decide what's best for you!
How long may it take to close a deal?
Generally, the escrow period is of 30 to 45 days. You can utilize this time investigating the property, getting your loan completed. However, it may change a little. Do consult your realtor regarding more details.
What is the difference between pre-qualifying and pre-approval?
Prequalified. It is the first step of the mortgage process where the bank evaluates your income, assets, and debt to calculate the amount of mortgage you are generally qualified for.
Preapproval. After prequalification, comes preapproval where you officially apply for a mortgage. Then, the lender or bank will thoroughly check your credit score and financial stability. Accordingly, they will tell you the amount of mortgage that has been approved for you.
Getting prequalified and preapproved means you already know your budget and thus don't have to waste time looking into houses that are beyond your resources. Sellers would find you more appealing as you are very close to getting a mortgage.
I want to sell my home. When is the best time?
There is no specific time or situation when only you can sell the home. It depends on the specific set of situations and events. If you mean, when can you get the highest price, then yes we have an answer. Previously, he have seen that the ratio between the sold price to the asked price has been high in February, March, and September, the spring months. On the other hand, December and January have been bad. However, all this facts and figures are likely to change depending on the competition you have on your property. Get in touch with a professional real estate agent and get an accurate idea.
Do I need to hire a real estate agent?
Honestly, it is not mandatory to hire a real estate agent. You can price your house, market and show then negotiate the offers all by yourself. However, you need to have thorough knowledge of the shifting real estate market, price and the true value of your home. That is a lot of work. Agents just don't bring prospective buyers to your home but also market your house, prepare all the necessary document, help you get the improvements done so you can get a good sale price. Don't you think all this expertise, less stress, increase sell price apart from saved time worth more than an agent's commission. Well, 90% sellers do!
How should I prepare to sell my home?
It is actually extremely important to prepare your home before listing it for sale. Not doing so could be disadvantageous for the seller in future. You can create your first impression only once so take it seriously. So keep the following things in mind:
Make sure the lighting is good – preferably the best.
Minimize any clutter.
Get the painting jobs done. Freshly painted houses are very impressive.
Get new carpets.
Get a pest control done – your home should not smell.
In case, you need detailed guidance on this check it with your real estate agent.
Things that I should be disclosing to the potential buyers.
It is better to be truthful. If you are aware of anything, share it with the buyer. No one prefers to get a bad deal. So, if there is a problem with the roof, appliances or the neighborhood, just be upfront and share. Even better, if you are aware of the repair requirements, get them fixed before putting it on the sale. It will prevent potential issues (even lawsuits) in future. Moreover, you will get a better price for a no-defect house.
Is it mandatory to put up a 'for sale' sign in front of my house?
It is not mandatory for the sellers to put up a 'for sale' sign. You definitely have the right to appeal for no sign. However, this sign has its own advantages. It helps to get your home all the exposure from the potential buyers. This means you get better deals. Probably, you are not aware but many people in your neighborhood or even a passerby could be interested to get a place there. This sign is an invitation to all of them. So, why not put it up and let them know so they can tell others. We recommend you not to ignore this sign as it is an important part of the selling procedure.
Can I cancel the contract?
Every seller wants to sell the home at a top dollar price. They even hope so but it doesn't happen that way all the time. Every home, every district, every contract; the terms are supposed to differ a lot. However, whatever be the reason if you still want to cancel the contract, then you might have to bear the expenses the real estate agent has incurred so far. Last but not the least, you may be held responsible for their brokerage.
What are the closing expenses that a seller has to bear?
In other words, how much will it cost me to the home? To be frank, there are several expenses that a buyer has to pay but not the seller and the other way round. In general, a seller has to pay for the closing expenses like survey, real estate commission, taxes and so on.
How to market my home?
Gone are those days when you will put up a 'home for sale' sign in your lawn and wait for some good buyers to come in. Today, you need to have a solid marketing plan for getting your home sold at a top dollar sale price. This is something that your realtor will help you with. We reside in a technically-advanced world where traditional marketing strategies aren't enough. A top realtor should be having an authority site along with extensive social media presence so that it shows up in the top Google search. It's crucial because almost 90% of home buyers start their home hunting online!
Should I do an open house to sell my home?
It isn't necessary to have an open house to get the house sold. Professional suggest sellers to have an open house in hope of having some additional potential buyers, but houses sold in an open house fall below 5%. Discuss it with your realtor and if you feel comfortable with his response then only go ahead.
Should I give a home warranty?
If your home is more than a decade old, it would wise to invest in a home warranty. Many home warranty companies would offer up to 400 USD coverage. Selling the house with a home warranty works in your favor. Apart from trusting you, the buyers also get to save some fund in the next year. You can ask your real estate agent to help you with the home warranty application.
How do I respond to a low ball offer?
When selling home, take it like a business decision. Keep all your emotions aside. However, sellers still do get low-ball offers. If one can deal the low-ball offer properly, he can still manage to sale the house at a nice price. The worst decision, a seller can make is by not responding to it. In reality, it is seen that some sellers get so upset with the offer that they could not respond to it and a lose a good opportunity to strike a deal. One should be giving a counter offer (even if it is close to the listed price). This is much better than letting a potential home buyer walk away.