Home buyers have a lot of questions, and if they don’t they should. According to Realtor.com these are the eight most common questions asked by buyers (with my answers):
1. What home can I afford?
Only a home buyer knows how much home they can afford, but equally important is how large of a loan you qualify for. These are often two different numbers. Start with the most important, how much of a loan will the bank grant you? Once you have that number, ask your loan officer or Realtor to provide you with the amount of your PITI (principal, interest, taxes and insurance). Are you comfortable with that monthly outlay? Not sure? As soon as you know what your monthly outgo will be, bank the amount that is over your current monthly housing expense. (Keep in mind as a homeowner, you are going to get a sizable tax deduction).
2. Can I buy a home and sell my current one at the same time?
Yes, there are several ways to go about this. You can list your home and sell it contingent upon you finding a home of your choice or insist that your buyer offer you a two-three month rent back after closing (so that you have time to find a new home). You can also try making offers contingent upon the sale of your home, but in today’s competitive real estate market, the hottest homes sell quickly and your contingent offer will not be so attractive – on the other hand, if the home has been on the market for a bit, the seller might be very excited to see your offer. This is when the expertise of your real estate agent comes into play. It is her job to convince the home seller and their real estate agent, how quickly your home will sell.
3. How many homes should I see before making an offer?
In a perfect world, you have been looking at open houses and available listings with your real estate agent before you write an offer. But it doesn’t always work that way. Fifteen years ago, I was showing homes to a young single woman. Granted prices were much lower, but let me share with you what happened. The very first home Tanja and I looked at was “the one”. It was in Burbank and the monthly payment on this two bedroom + den home was less than Tanja’s monthly rent (in Los Feliz). We looked at a couple of other homes in her price range, but this home was the least expensive in the best neighborhood, there was no need to keep looking and miss out on the perfect fit and Tanja was smart (and brave) enough to know it.
4. What do you think the seller will accept as a fair price?
It’s a seller’s market throughout most of the country. The home seller is not looking for a fair price but the highest price he can obtain. Often terms are just as important as offered price – learn more about that here
5. How do I know if the property is a good deal?
Always keep an eye on resale. When a property has an incurable defect (across from the freeway, near high tension lines, etc.) it will need to be priced accordingly when it’s time for you to sell. The better question, is will I be happy coming home? Will I be excited to welcome friends and family to my home? It really doesn’t make sense to purchase a home you don’t love.
6. How quickly can I close?
Due to recent changes in government regulations regarding loan disclosures (Trid) 30 day escrows have stretched to 40+ days. Of course cash transactions can be closed much faster.
7. Should I get a home inspection?
A better question is how many inspections should you obtain. Your primary inspector is similar to a general practitioner who may recommend you to specialists. In addition to your general inspection, common inspections include: sewer line scan, chimney, foundation, etc. Once your general inspector has checked out the property, they will often make recommendations as to other inspections you should consider.
8. When can I back out if I change my mind?
Most real estate purchase contracts are written with contingencies. You are buying the home subject to certain conditions being met. If they do not meet with your approval, your earnest money deposit will be refunded. The most common are that you approve the physical inspection, that you are able to obtain financing and that the property appraises for the amount you agreed to pay.
Related Post: Top 7 reasons your offer was rejected