FAQs for Home Buyers

For most people, buying a home is the biggest financial transaction they will ever make. One of the keys to making the home buying process easier and more understandable is planning. Being able to anticipate requests from lenders, lawyers and a host of other professionals will help reduce the stress and create valuable shortcuts in the home buying experience. The knowledge, experience and training of a local REALTOR® can be essential to your success.

Am I ready to buy?

• Whether you are a first time home buyer or a repeat buyer, the questions you need to ask yourself are:
  • Why do you want to buy?
  • Do you know what you want?
  • Do you have a purchasing timeframe?
  • Is buying an option or a requirement?

Do I have the money?

• Homes and financing are closely intertwined.  In addition to a down payment, purchasers also need money for closing costs and other expenses. Remember, less down payment means a higher mortgage payment.
  

Are my finances in order?

• In the wake of the mortgage crisis, those loan programs with little or nothing down are no longer available to most people. You need good credit. For at least one year before purchasing a home, you should make sure that every credit card bill, rent check, car payment and any other debt is paid on time.
  

Why should I use a REALTOR®?

• Local REALTORS® are the community experts. They track real estate trends, share neighborhood concerns and are good neighbors who are in the business of helping others buy and sell homes. They belong to the National Association of REALTORS® (NAR) and must adhere to a strict Code of Ethics. Only NAR members can use the term “REALTOR®”.
  

How do I choose a REALTOR®?

• There are several ways to find a REALTOR®:
• Get recommendations from past buyers
• Use the Find a REALTOR® search engine
• Check the listings in local real estate magazines and newspapers
• Whether you choose to meet with only one REALTOR® or several, there will be a number of questions that you will want to ask. Think of this process as a job interview. Choose the REALTOR® that you feel will best serve your needs.

How do I get financing?

• Few people can buy a home for cash, which means that virtually all buyers require a loan, also known as a mortgage. REALTORS® routinely recommend that perspective buyers start the mortgage process well before they start looking at houses. Buyers should have as much information as possible regarding mortgage options and cost. Read more on mortgages here.
  

How do I look for a home?

• The housing market is complicated because the stock of homes for sale is always in flux. By knowing as much as possible about the preferred market, price range, location, size, design, amenities and benefits you want, it will make your search for the perfect home easier. Your REALTOR® has a working knowledge of the local home market and will be able to help you find the home that best suits your needs.
  

I found a house, now what?

• Once you’ve found a house, you have 3 options:
• Accept the seller’s offer and create a contract
• Reject the seller’s offer and continue to look for a house
• Make a counter-offer and suggest different terms
• Your REALTOR® can help you make a decision that best suits your needs.
  

How do I make an offer?

• Typically you will complete an offer that your REALTOR® will present to the owner and their representative. While much attention is spent on the offering prices, a proposal to buy includes both the price and terms. Sometimes terms can represent thousands of dollars in additional value to the buyer or additional costs. All terms should be carefully reviewed before a decision is made.
  

What is a counter-offer?

• A counter offer is nothing more than a new offer. They often reflect the back and forth activity of the market. While counter-offers are an efficient and practical route in the home selling process, they can contain tricky clauses and hidden costs. It is important to carefully review all offers before accepting one. Your REALTOR® can explain the process in detail and help with the negotiations.
  

How do you negotiate?

• Real estate bargaining usually involves compromises by both sides. Perspective buyers should be treated with respect, and sellers should never lose sight of their best interests or their baseline transaction requirements.
  

Do I need insurance?

• The basic idea of real estate insurance is to protect owners in the event of a catastrophe. There are basic forms of insurance associated with home ownership including these basic types:
• Title Insurance – purchased with a one-time fee at closing, this protects the owners in the event that the title of the property proves to be invalid.
• Homeowners Insurance – required by lenders; this provides fire, theft and liability coverage as well as in some cases property such as furniture and home office equipment.
• Flood Insurance – generally required in flood prone areas. Your REALTOR® can explain which locations require such insurance.
• Home Warranties – designed to provide several forms of protection in the event of a defect or breakdown such as plumbing repairs or replacing broken appliances. For more on home warranties go here
  

Where do I get insurance?

• The time to obtain insurance is at closing, however it is important to speak with an insurance broker prior to closing. Be sure to ask about limitations, costs, deductibles and other forms of insurance.
  

When do I close?

• A signed selling agreement is NOT the end of the real estate transaction. The sale agreement simply sets a purchase price for the home and a series of terms and conditions. It takes time to arrange financing, conduct inspections, obtain appraisals, pack and actually move. It is important to review the sales agreement and review your obligations.
  

What happens at closing?

• A closing is simply a meeting where the closing agent (the party who conducts the settlement) takes money from the buyer, pays out money to the owner, makes sure that the title is correctly recorded in local records along with any mortgage liens and assures that any transaction costs are paid. Closing is also where “adjustments” are made, such as unpaid property taxes.
  

I have closed on my home. Now what?

• Those papers you received at closing are extremely important; keep them in a safe place. In the short term, they will help establish tax deductions for the year the house was purchased. In the future, they will be important for tax purposes when the property is sold.
• Determine the status of the utilities required at the home. You want the utility bills paid in full by the seller by the time of closing and you want those services transferred to your name after closing.
• Make sure you’ve contacted other services such as garbage removal and the post office after you have closed.
• About 2 weeks after closing, contact the local property records office and confirm that your deed was officially recorded.
• Enjoy your home!

Information provided by Realtor.com