Frequently Asked Buyers Questions


Q. What do I need to do before I think about purchasing a home?

A:  Get your finances in order

Often when people are considering buying a home -- whether it’s their first home, an investment or anything in between -- they believe they can just purchase one like buying a new car. Because a home is typically the largest purchase you’ll make, we’ve provided some tips on how to get your finances in order before looking for a new home.

 

Check with a lender to see what you qualify for
You should know facts such as:

  • Annual income
  • Amount of cash you have for a down payment
  • Other home loans
  • Credit card balances
  • Other loan balances (vehicles, home equity, etc.)
  • Other factors affecting your income (e.g. tax payments, dividends, etc.)

 

Q: Do I need to be prequalified?

A: It is generally a good idea to get prequalified

Having a prequalification letter form your lender strengthens your offer. Consider this: the seller will be more willing to work with you because it means less time and hassle for them.

Q: What is the cost of prequalification?

 
A: There is no cost associated with getting prequalified.


Q: What is prequalification?


A: Prequalification is where you have spoken to a lender about a possible home loan.

This is when you have spoken to a lender, usually over the phone. You will provide him with the information described above. They will give you an estimate of what they believe you would qualify for if all the information you have given them is accurate.

Remember, this does not mean you are qualified. People often think because they are prequalified they can get the loan when they find the home of their dreams. That may not be true. At this point in the loan process they have not run a credit check or verified any of the information you have provided. There may be things on your credit report that are inaccurate or that you have forgotten about that may inhibit the loan process or affect the loan amount.

Q: If I find a home that is not listed by you can you still show it to me?


A: Absolutely. You’ll want a buyer agent on your side looking out for your best interests.

We can show you any home, no matter who’s listing it.

Q: When we find a house we like, how do we buy it?


A: We’ll take care of the details for you as part of our superior client service.

Here are the steps necessary to a successful home buying experience:

  When your Offer to Purchase is presented to the seller, he has three options:

1.      He can accept your offer
2.      He can reject your offer
3.      He can make a counteroffer

Bring a check for the earnest money with you when we present the Offer to Purchase. One percent of the sale price is usually adequate.
We negotiate on your behalf. When the seller accepts your offer, or you accept his counteroffer in writing, you have a binding contract. Your earnest money will be deposited in the listing broker’s trust account until closing.

Q: Is it best to make a really low offer at first?


A: If your offer is too low you may take some unwanted risks.

It is important to remember that if you make a low offer on a home and the offer is rejected or countered, another prospective buyer may submit an offer that may be accepted by the seller before you have the opportunity to submit another one. I have even heard of experiences where a buyer made a low offer to the seller and the seller was insulted and refused to entertain any more offers from the client.

Q: Would it be in my best interest to work with several Realtors and not just one?


A: It is always in your best interest to have a buyers agent looking out for your best interests and by having the same one, they can more easily help you find what you’re looking for.

Because we represent you as your buyers agent, we have your best interests in mind. Best of all, we are paid by the seller when we find the right home for you! As a loyal client, you’ll be rewarded by receiving the maximum service from our team of experts. You’ll get all of our professional advice, experience and assistance at no cost to you.

Q: What are the advantages of homeownership?

 

A: There are several benefits to owning your own home not the least of which is pride of ownership.

The American dream of homeownership is easier to attain than you might think. But getting back down to basics, there are at least seven reasons to own your own home.

  1. Tax breaks

Because you can deduct your mortgage interest, the property taxes you pay and other costs involved in buying a home, means buying one can provide financial benefits in the form of tax breaks.

  1. Investment value

Since real estate typically appreciates rather than depreciates, it makes a good investment. 

  1. Builds equity

Mortgage payments build equity in your home, renting does not. 

  1. Savings plan

The equity building in your home can be considered a savings plan.

  1. Predictable housing costs

Mortgage payments don’t increase like rent payments do over the years. The only things that can increase are your property taxes and insurance.

  1. Freedom to personalize

You have total control over decorating and improving your home. 

  1. Owning a home for several years allows you to become a part of a neighborhood. You can establish lasting friendships and participate in your community.

Q: What should I consider before I choose a particular home?

 

A: Four considerations readily come to mind.

  1. Make sure the home is right for you. Does it have all your needs and most, if not all, your wants?
  1. Is the home in the right location? Consider how close it is to work and schools. What about the school district? Is it a good one? Is the home in a good neighborhood? Located on a cul de sac? Near a busy intersection? Make sure the home you choose is located in proximity to the things that are important to you and your family.
  1. Will your furnishings fit in the home comfortably? Is the yard the right size for your needs? How about the layout? Is it an open-floor plan if that’s what you prefer? Check your wish list to see how many features it provides.
  1. Since your home is probably your biggest investment, don’t buy it out of frustration. If you don’t find a home with all your needs, don’t compromise and buy out of impatience. Keep looking until you find what you want or consider building.

 

Q: What’s the difference between being pre-approved and being pre-qualified?

 

A: There’s a big difference between pre-approval and pre-qualification.

Being pre-qualified is a preliminary process, in which a lender asks you a few questions and, based on your answers, pronounces you pre-qualified. They issue you a certificate to show sellers. However, none of the information has been verified as it has in the more extensive pre-approval process.

Q: What are my mortgage options?

 

A: Please see our article on mortgages for complete information

but a quick overview of your mortgage options include Fixed-Rate Mortgages and Adjustable-Rate Mortgages, FHA and VA loans, balloon payments and two-step mortgages, 15-year and 30-year mortgages. For help in determining the best mortgage for you, talk to a lender. We’ve got a list of trusted professionals that will take very good care of you to help you get the loan you need.

 

 

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Bill Zufelt  Realtor®  License #01491164