FAQs

Q?What first? Call a Realtor.

A Realtor can help you navigate the process of buying or selling a home. There are many steps from mortgage pre-qualifying, writing a contract that includes all the disclosures required by state and federal laws, home inspections and what to do if problems with the property are found, to the closing process. There are many moving parts to a real estate transaction. It is the most expensive purchase many people will make. A Realtor can assist you with navigating the market and the process. Realtors are good at heading off problems, often before they arise. For both seller and buyer, it is worth it to have a Realtor’s services.

Q?Where do I start if I want to buy a house?

There are a couple of places you can start, if you want to purchase a home. A good first option is to choose a Realtor. A second option, if you have a good banking relationship, is to get pre-qualified for a mortgage. A professional Realtor? can assist you with the many questions that you will have during the home buying process, including the pre-qualification process.

Q?What does pre-qualification mean & why should I get pre-qualified?

Pre-qualification is simply the process of being pre-qualified for a mortgage. It has several benefits. ?You can pre-qualify with the bank, credit union or mortgage company of your choice.

Helps you to know what price range home to look for.
If you have any credit issues to correct, it gets you started on the process.
Helps you to anticipate your monthly home mortgage, insurance and taxes expense so you can make a budget for after you have purchased your new home.
Helps you to keep your property search in realistic possibilities. No one wants the discouragement of falling in love with a home that they can’t purchase.
Many sellers, particularly foreclosures, require that you are pre-qualified before you can make an offer.

Q?May I have the property inspected? Who pays for it and when does that happen?

The buyer always has the right to have a property inspected, even when using an “As Is” contract. Once you have chosen a property and negotiated a signed contract with the seller,?that is the time to order an inspection from a professional home inspection company.? The contract will have? specific inspection time period – usually ?10 -15 calendar days. The?buyer? usually orders the inspection and the buyer pays for the inspection. The inspection company will make arrangements with the listing agency to get access to the home. The buyer may be present for the inspection if they wish. If the buyer chooses to be present, the buyer’s realtor must also be present. Home inspections generally cost between $100 and $250.? If the inspection reveals problems with the property that are more than the buyer wishes to repair, like?needing a roof, the buyer has several options. ?Sometimes a buyer may ask a seller to repair something or offer a repair credit. Other times the buyer will simply have the option to rescind the contract (make sure to be within your inspection period to avoid the risk of losing the deposit).

Q?If I am pre-qualified, what do I have to do to get the mortgage?

Pre-qualifying is just the beginning step that let’s you know how much money you are able to borrow. This?enables you shop and find the right home. Once, you have found the home of your choice, negotiated a price and gotten a signed contract (by both seller and buyer), then you must apply for the?home loan.? The lender will need a copy of the signed contract. They will also have you resubmit some of the same info that you submitted during?the prequalification stage (all info must be most current). The lender will run a credit check, verify your?job?info and income , order the appraisal, may order the survey (or may ask you to order the survey) and communicate with the closing agent.

Q?Do I have to get an appraisal? Who chooses the appraiser? Is it necessary?

The mortgage company usually orders the appraisal from an appraisal service with multiple appraisers working for the service. Neither you nor your lender can choose the specific appraiser, in order to maintain the highest standard of objectivity. The buyer generally pays for the appraisal and should receive a copy of it. You may have to ask your lending agent for a copy. Lenders require an appraisal. If you are purchasing a home with cash, it is not required, but still recommended. Generally the appraisal is ordered after the inspection / inspection time period is compete.

Q?What about homeowners insurance? Who buys it and when?

Home owners insurance is required if the property is mortgaged. If it is a cash sale, it is still highly recommended that all home owners have insurance. It should be in effect on the day of closing. The homeowner gets to choose the insurance company of their choice. The lender require minimum coverage to include the amount of the loan. Click here to read “12?Ways?to Save on Homeowner Insurance.”?? Your homeowners insurance must be effective on closing date. Lender will not fund the transaction without effective insurance.

Q?Who pays for closing costs?

Closing costs will be specified in the contract. There are usual and customary charges associated with seller and buyer. All the costs associated with the mortgage plus appraisal and survey?are normally paid by the buyer. The mortgage company will give you a?Good Faith Estimate (GFE) of the closing costs that will be due?for the transaction. Title insurance, doc stamps and closing fee and real estate commissions?are most often paid by the seller. In most cases whoever pays for the title insurance chooses the closing agent. The listing agent will give the seller a GFE of estimated closing cost at time of listing. Taxes, municipal charges (such as garbage collection) and HOA fees (if any) are usually pro-rated between buyer and seller.

Q?What is an escrow?

There are?two times we refer to escrow:

Escrow deposit – refers to the deposit or “earnest money” that you place when you submit an offer to purchase a property. This is because the “escrow” company deposits the money into a separate account to hold until it is given to the closing agent to apply to your property or refunded in the event that?the offer is rescinded.

Monthly escrow – refers to your monthly mortgage payment also including insurance and taxes being collected. The extra money collected by the mortgage company for the future tax and insurance bill is deposited into a separate “escrow” account to accumulate until your annual tax or?insurance bill arrives to the?mortgage company. ?Many lenders require an escrow arrangement to? be confident that the?taxes and insurance are always?up to date. It also helps a homebuyer to plan and budget expenses easier.