We saw a home for sale that we’re interested in buying. Where do we start?
This is definitely the most common question. Often first-time homebuyers find a home they are interested in buying and contact us. That’s great and we truly appreciate them doing so but we would actually be step two. Step one is to contact a lender and see what type of mortgage you qualify for and for how much.
Do we have to make an offer at the asking price or can we come in lower?
Short answer: you can offer any price. Long answer: knowing the market and how fast or slow houses are moving and what direction price is trending need to come into consideration when placing an offer. If the market is moving quickly and home prices are going up, then there will most likely be other willing buyers. The best approach is to set a budget you feel comfortable with and stick to it. Remember, just like cars, there is always another house. Our advice, try not to get overly attached emotionally until you have the keys.
Who determines the sales price of a home?
Real estate is a unique transaction where more than two parties (buyer/seller) can be involved in the final price – provided financing is part of the purchase. Cash offers are a bit more direct but if financing is involved then the lender will typically require an appraisal, performed by an appraiser, and the bank still has a say in approving the financing price. While neither the appraiser nor the employee at the bank can determine the sales price, they can have an impact on the financing which can affect the transfer of the property based on the determined value.
What if I change my mind about purchasing? Is there a deadline to back out?
There is no deadline for when a transaction can be canceled. The buyer can essentially back out at any time however, there could be financial consequences – mainly losing the earnest money deposit albeit if the seller has moved there could potentially be additional litigation for “liquidated damages”.
There are easier ways to cancel a transaction and that’s because purchase agreements typically have contingencies like the appraisal price and repairs that may come up in the home inspection – both of which are usually ordered after the purchase agreement is signed and in escrow.
Can I purchase another home even though I own the one I currently live in?
Yes. Absolutely. This has more to do with qualifying for another mortgage., If you don’t have the intention of selling your current home, there are a few caveats that can however prevent the purchase of another home, specifically with the VA or FHA.
How many homes does it typically take to see before finding one to make an offer?
There are not a set number of homes to search before finding the right one for you. Many factors come into play but the good news is online technology, research and even posted photos help narrow down the search. Combined with a dedicated real estate agent determined to find a home specifically for you does it even honestly matter how many it takes? Years later you want to be happy with your decision. And if things don’t work out like planned, or if your needs change, we’re here to help you sell and upgrade!
How do I get the loan to purchase a home?
There are many loan options available for purchasing a home but the main things that determine your approval levels are :
- Credit Rating
- Income and Longevity
- Current Debt
- Cash Down
To find out more info about loan options or see if you qualify for a home loan click here.
Is a home inspection required?
Cash buyers have the option to determine if they want an inspection or not but those that finance don’t typically have a choice because banks usually require them for a mortgage. The exception may be a hard money or private lender. Banks want to be sure there are no issues with the home before they finance it. Plus, it’s a good idea that you know as well. Last thing you would want is to skip an inspection and find out later there are issues with the home, especially if you could have had the seller repair before closing.
How are the schools?
Schools vary from location and often even within the district. The best way to determine if the local schools are to the standard you prefer would be to do a Google search or go to GreatSchools and check the ratings. Another helpful idea is to research how district transfers work.
I found the perfect home; do I need an agent to represent me?
This is a good question. You can certainly go to the open house or call the number on the yard sign and have the listing agent complete an offer for you but it’s best to have your own agent. The seller is paying the realtor fees and that fee is established before the house gets listed so you would not be able to get a discount on the realtor fees off the purchase price. The listing agent would simply get a double commission, which isn’t an issue but, the main reason you want to have your own agent is the listing agent is working for the seller, not the buyer. Although; the agent would be entering a dual agency and would have to treat both sides fairly, it’s better to have your own agent negotiate on your behalf that is not negotiating on behalf of the seller as well.
How do I buy a foreclosure/fixer-upper?
There are a few ways to do so. Fixer-Uppers can be found on the MLS or even through a probate sale and sometimes for sale by owner. They usually sell quickly but have better financing options when buying. A foreclosure is pretty straightforward. They are sold through a third party called a trustee and are auctioned off. Auctions mainly take place in public spaces like in front of a courthouse but are now also being accessed online. When buying a foreclosure, the old adage “cash is king” is true. All bidders must qualify – prove they have the funds to purchase – and the winning bidder must pay in full the auctioned price after the auction is completed: in some cases, they allow up to 24hrs. Hard-money lending is another possible option as well as finding investors. There is a lot more to it than this and there are many books written on the subject but if you would like more info give us a call. This is one of the most fun topics to discuss!
How do I purchase a home like the guy on the infomercial described?
Not even those people often know. If they did, they generally would not be selling their “system” on TV. The sad truth is a lot of people buy those products and most of the income those infomercial people make is from selling that product, not home or investments.
How do I invest in Real Estate?
There are many strategies and “systems” out there that can work but the best way is to look at those that are really successful at it, find out what strategy you like and mimic them. Like any investment there is risk but there is also many ways to invest in real estate:
- Passive income and rental homes
- Purchasing notes (mortgages)
- Fix and Flip
- Vacation rentals
- Commercial real estate
- Development
- Lease options
- Seller financing
This is another one of those questions that has many books written about each subject. If you would like more detail give us a call, we love to talk Real Estate investing.
