23 May Frequently Asked Home Buyer Questions
The home buying process can be emotional and overwhelming for a buyer. This could be your first home purchase or your fourth, it’s still going to bring these feelings. There are many moving parts in the grand scheme of things and of course you’re going to have a lot of questions. But how do you ease the stress of buying a home? Prepare! The best way to ease your mind is to educate yourself and prepare for this process. No question is a wrong question and you should feel comfortable coming to your agent with them. A great agent will help you with these questions and make your home purchase as smooth as possible.
Let’s get you started! I’ve compiled a list of frequently asked questions and answers. Again, no question is a silly question. If you’re not sure about something, ask! We’re happy to help and can use our resources to get you the best answer possible.
- Question: Should I speak with a loan officer before looking at homes?
- Answer: Yes! Getting pre-approved is the best first step and will help you understand how much you can afford. If you are unable to get pre-approved yet, a loan officer will guide you on next steps to get approved. They also have the knowledge to see if you qualify for local home buyer programs. There are local first-time homebuyer programs that help with down payments and closing costs! It’s also important to know all the costs associated with buying a home including earnest money, escrow fees, and closing costs. A loan officer will break down all the financials for you.
- Question: How many homes should I see before making an offer?
- Answer: There will never be an exact number for this question. It’s all about how you feel when you walk into a new home. Most times, you can walk through a new home and envision you and your belongings there and it just “feels right”. This could happen with the very first home you walk through or it could be the 100th. This is a big purchase and the decision to write an offer has to feel right for you.
- Question: How do you know the property is a good deal?
- Answer: This is where your Realtor comes in. There are multiple factors that play in the value of a home. Location and condition are a couple of the biggest roles. Your Realtor will need to do a market analysis on the homes in the area to gauge the current price of the home as well as future resale value. For instance, a home in an up and coming neighborhood will have a higher resale value later down the road. The current condition of the home will make the biggest difference in how much you offer. Nine times out of 10 your agent will encourage an inspection before proceeding with the purchase of a home. A little money spent now on an inspection could save you thousands of dollars later.
- Question: How soon can we close on our new home?
- Answer: Typically the process takes 30-60 days after an accepted offer. Once an offer has been signed by both the buyer and seller, there’s negotiable time window for an inspection to happen on the buyer’s behalf. The appraisal comes after the inspection (unless this is a cash offer). The appraisal determines the amount the bank will finance on that particular home. Your loan officer will then need 30 days to process the financing portion up to the closing date.
- Question: How much do buyers pay their Realtor?
- Answer: This can vary by state. In the state of Minnesota, the seller typically pays the commision for both the selling agent and the buyer’s agent. The listing agent will negotiate a percentage of commission with the seller. In turn, the listing agent will split it with the buyer’s agent for bringing the buyer and facilitating the transaction.
- Question: How much out of pocket money do I need for this purchase?
- Answer: Downpayments range from 3-20% on a loan. This could be 0% for some VA loans or if you have first-time homebuyer assistance. With closing costs, you can expect 2-5% of the purchase price to be out of pocket.
- Question: What’s the best advice you can give homebuyers?
- Answer: Knowledge is power! Whether this knowledge is coming from you or from your agent, it’s going to best serve you through this process. Also, make sure you’re comfortable with your agent. This process can take from 1 month to multiple years! An agent’s entire goal is to help you through this important decision in your life.
Check out all of our blogs for more useful information! Contact us with any questions you may have.