Top frequently asked questions
Why should I contact a local Realtor?
All real estate is local. A Realtor that is familiar with the neighborhoods you are interested in can know instantly if a home is priced well or overpriced. A local Realtor can tell you more about the community than just the housing market. They can help you become acclimated with schools, shopping, transportation and more. A local Realtor who truly knows the area you are interested in is always the best choice.
Can I find a rent-to-own property?
There are certainly rent-to-own properties available. Your Realtor would be able to help you with this. You might also be able to find a home for rent on your own and find a landlord willing to enter an agreement, however it is strongly advised you get a Realtor involved who is familiar with rent-to-own properties to help you negotiate and write a contract that protects you.
I own a home, should I buy another before selling my current home?
This, like so many other things, depends on a lot of factors. It might depend on if you can afford two house payments. It might depend on if you intend to rent the former house out. It might not even be a possibility, depending on what your lender says the conditions of a loan might be. In a hot market, while it might be tempting to buy before selling in order to snap up a home you love, unless you are in the position to rent out or afford both homes, this is risky and should not be done.
Who pays the Realtor fees when buying a home?
In a word: the seller. To explain a little further: When a property is listed, the listing broker and seller reach an agreement on the amount that will be paid for selling the home. If the listing brokerage handles the entire transaction their company gets the entire amount. If the buyer has a Realtor the seller and listing broker have an agreement on the amount that the buyer’s broker will be compensated. Buyers may think they will save money if they do not have a Realtor because only half of the commission will be paid out. This is not true. The entire amount agreed upon will still be paid out, it just all goes to the listing brokerage.
Do I really need a Realtor when buying a home?
It is certainly possible to buy a home without a Realtor. But not usually. Unless it is a For Sale By Owner situation, there is going to be a Realtor involved in your transaction, so it may as well be YOUR Realtor, working for you. In a For Sale By Owner situation, a seller has tried to avoid the cost of a Realtor commission, and they probably won’t like it if you want someone to help you, but there has never been a more important time to have someone on your side. For Sale By Owner transactions are where most buyers make big mistakes that cost them a lot of money. It is highly recommended you have a Realtor working for you even if you have to pay them out of your own pocket. The questions and possibility for error begin before offer is even written. Get professional help. In the case of a listed property, there IS a Realtor already involved. It is the listing agent. The listing agent works for the seller of the home. If you do not have your own Realtor, the listing agent will help facilitate the transaction, but keep in mind, every decision made and every bit of guidance given will be in the best interest of the seller. To protect yourself, have a Realtor of your own. It does not cost you any more to have a Realtor working for you, so you may as well have one, rather than relying on the listing agent to help you.
How do I know which mortgage is best for me?
This is one of the most difficult things to decide, because the general public is void of the skills to actually figure this out…so it is where trust comes in and why you need to work with a lender and Realtor team you can put faith in. A knowledgeable lender can look at your financial situation and suggest the best loan program for you. Much of it is going to have to do with your credit rating. Not surprisingly people with the best credit, can get the most attractive loan rates. People with more blemished credit may have to get a higher rate loan. Conventional or FHA will be a main consideration. It is wise to get more than 1 opinion about your loan program, and then talk to someone who can help you decipher the big pictiure. People always get hung up on getting the lowest rate, but sometimes, a loan with higher closing costs can more than eat up whatever savings there would be on a lower interest loan. Do your homework, read, research, talk to people you trust and get more than one opinion.
What do I need to take with me when I apply for a mortgage?
This will vary slightly with each person’s situation, but in general lenders will want to see your W2’s showing the amount of earnings, documentation for any additional earnings, perhaps tax returns, most recent checking account statements, statements of any other assets, identification, social security number, and a good accounting of what types of financial responsibilities you have.
So what will my mortgage cover?
Your mortgage covers the purchase price of your home, and if you’ve chosen to escrow taxes and insurance, it will cover those as well.
In addition to the mortgage payment, what other costs do I need to consider?
When buying a home, there are many costs people don’t usually think about. To “close” the transaction, a buyer must pay what are called “closing” costs. These may include taxes, insurance escrows, mortgage insurance, PMI, prepaid interest, lender costs, title company costs and other costs associated with closing the loan. These can vary depending upon the type of loan. In addition to the actual mortgage cost, there are taxes and insurance that people generally escrow into their payments so that the money is there when taxes become due and the insurance bill is due. Another cost a person has when buying a home is an initial earnest money deposit. This is a “good faith deposit” generally given to your Realtor when writing the offer on the property to show good faith in the transaction. The amount varies depending on the price of the home and local custom and can range from $500 to $10000 or even more. Your Realtor can guide you on this. This is not a legally required fee, but it is customary and without it a seller is unlikely to accept an offer. It shows a buyer is serious. This money can be returned if the transaction is negated within a specified number of days as a result of inspection concerns. After that period, the money would be lost if the buyer were to back out of the deal. In addition to the prescribed costs associated with the actual purchase of the home, buyers need to keep in mind that there are always going to be costs associated with ownership of a home. There will be costs for operating the home, such as utility bills, and costs for things you want to add to the home like curtains, landscaping, furnishings, and any repairs that may be needed.
How do I know if I can get a loan?
The only way to know for sure if you can get a loan is to consult with a lending professional. They can usually tell you very quickly (sometimes on the spot, sometimes within a day or two) if you can get a loan and what type of loan you can get.
How much money will I have to come up with to buy a home?
Like so many other specifics in a real estate transaction, this depends on a wide number of factors. There are loan programs that require very little down. There are other programs that require 3-5% of your own money in the transaction, whether that be in the form of a down payment, or in closing costs. The amount required depends on the loan program, your credit, the price of the house, and many other factors. The best way to get a true answer to this question is to consult with a loan professional.
Are there special home ownership grants or programs for single parents?
There are some government programs for single parents. To know if you qualify for them the best thing to do is talk to a knowledgeable lender. In the meantime, to know what programs are available, a quick Google search of “home buyer assistance for single parents” will bring up some results. With any assistance program, there are many particular circumstances to be considered before it can be known if any individual qualifies, but there are a variety of assistance programs offered for those who qualify. Programs also vary state to state. To begin try searching the phada.org site or the spaoa.org site or the phada.org sites.
Why should I use a real estate broker? How do I find one?
Realtors are experts at selling real estate. They are professionals. Just like you go to a doctor for medical assistance, you should go to a Realtor for real estate help. A local Realtor will be sure to help you find the property you seek. Or if you are selling, help guide you to get the best price for your home. You are at the right place to find a broker right now, at PropertyUp, where we are experts in local real estate.
Can I become a home-buyer even if I have bad credit and don’t have much of a downpayment?
It depends on many factors. Certainly people with compromised credit are homeowners, and there are mortgage plans that do not require a large downpayment. However, the only way to know for sure is consult with a mortgage specialist at a bank, credit union, or mortgage company and layout your personal situation and see what can be done for you. A good mortgage specialist will help give you steps to repair your credit if they are not able to get you a mortgage at the present time.
Why should I buy, instead of rent?
When you buy you are investing in your own property, which you will be able to sell someday, or perhaps rent to someone else. When you rent, you are paying money to live somewhere, without any chance of ever getting your money back. In addition, depending on mortgage rates, often a house payment is less per month than a rent payment. Also, when you buy, you have no restrictions as to what you can do with your property (except local ordinances, of course). When you rent, you are subject to rules another person makes up for their property.