QUESTIONS THAT BUYERS FREQUENTLY ASK US
Having a good real estate agent to look out for your interests as you buy your new home is an important asset that you don’t want to overlook. It’s our job to keep up with all the details of the deal from day-to-day, and keep everything moving smoothly on track toward closing. We can help shield you from much of the frustration and day-to-day angst associated with buying a new home. The more education that you have about possible costly mistakes that could be made in buying a home, the more chance you have to keep the whole home buying process moving along smoothly and quickly toward a successful close.
a. The answer is as individual as you are. Most times, we’ll advise you to list your present home and shop for your new home simultaneously. However, depending on the market and/or your individual needs, you may want to consider an alternative. In a robust real estate market, a home could sell within a few days of listing. So, if you have very specific criteria for your new home with regard to location, size, views, etc in a competitive market, you may want to begin searching for and buying a home first before you sell your existing home. A creative lender can help you to make this scenario work.
a. For the most part, you want to see a number of homes so that you can become familiar with what you expect to get for your money. Some buyers find a home that “fits” after only a few trips and for some it just takes longer. It depends on the inventory at the time you are looking and also on your own wants and needs. When you do find a home that you really like, it’s a good idea to go back and look at it during a different time of the day. This will give you some better insight into what it will be like living in the home full time.
a. When you find the house that meets most of your needs and wants, you’ll likely find yourself getting emotionally involved. Things like “how will my furniture fit?”, “what things will I change?”, and “gee, I’d better arrange for a moving van” will float around in your mind. But…….there are a number of steps that must be taken before those keys are turned over. Part of our job is to help you think clearly and objectively at this point so that the offer you make is a realistic one. Supply and demand, the condition of the home, how long it has been on the market and your own personal circumstances all come into play when you frame your offer. How much do you really want the home? What is the demand for the home-are there other offers on the table? If you “low ball”, some sellers will react with a counter offer or an outright dismissal. If multiple bids are anticipated, we advise to go with your “best offer”. We can advise you on ways to make your offer more attractive. It’s not always just the price that is important to a seller. Remember, it’s our job to close the sale for you.
a. When you are ready to shop for a loan you have two basic types of mortgage stores to shop — direct lenders and mortgage brokers. Direct lenders, like your bank, have money to lend. They make the final decision on your application. Brokers are intermediaries who have many lenders from which to choose. Direct lenders have a limited number of in-house loans available. Brokers can shop many lenders for each lenders’ store of loans. If you have special financing needs and can’t find a lender to suit them, an experienced broker may be able to ferret out the loan you need. On another note, some home buyers fail to stay up with the requirements of the lender as the home progresses to closing and then find themselves way behind in the process at the very last minute. Sometimes this can lead to delay or even cancellation of the house closing and frequently can happen when a buyer uses an internet lender. We can help you take care of your end of the deal by staying on the same page as the lender all the way through the process. And remember to choose a lender that you are confident will be able to be reached easily by phone when questions or problems need to be addressed immediately.
a. Everyone’s credit rating is based on a combined score that is generated from three credit bureaus that look at your credit history, amount of credit available, and the recent inquiries that determine what is called your FICO score. For a small fee, you can get your score or review your credit report by going online to www.myfico.com or by contacting the credit bureaus directly at:
EXPERIAN www.experian.com or (888) 397-3742
TRANSUNION www.transunion.com or (800) 916-8800
a. Mortgage points are a one time charge that a buyer pays in exchange for a lower interest rate. They are usually paid at settlement. Each “point” costs one percent of the mortgage amount, i.e $2,000 on a $200,000 loan. The lower rate will reduce the monthly mortgage payment. Also, points paid in conjunction with the purchase of a home are generally tax-deductible in the year they’re paid (make sure you consult your tax advisor). Monthly savings will often exceed what was paid in points in only a few years’ time.
a. In a very small number of cases this can happen. If it does, there are other alternatives. A second appraisal can be sought (all appraisers must be approved by the lender) or the seller may be willing to adjust the price or offer other concessions. The two sides may be willing to negotiate further.
a. Title insurance assures that you have clear title to the home you are purchasing. It’s very important and the primary component of “due diligence”. The title search determines whether the seller actually owns the property and if there are any claims against it. In most cases, the buyer pays for the insurance. We work with a number of very good title companies or you can choose to use your own. In any case, the title search is ordered shortly after an agreement of sale is reached and then paid for at settlement. The price is state mandated.
a. Mortgage lenders will typically require an inspection for wood destroying insects. It is usually paid for by the buyer. The city of Philadelphia requires a City Certification which will tell you if there are outstanding violations on the home. In most cases, this is paid for by the seller and it is up to the seller to provide you with a clear City Certification unless there are some negotiations otherwise. A comprehensive home inspection is something that the buyer orders. They must be done within a specified period within the time frame of the agreement of sale parameters. It is not required which is why the buyer pays for it but it is a wise thing to do. We highly recommend that, at the time of the inspection, you accompany the inspector as he/she does their inspection. This is important so you can learn firsthand as much as possible about the home you are about to purchase-including such basics as where the main water shut-off and electrical distribution boxes are. Is a home inspection worth the price? Consider this. Home inspections cost between $200 and $400. Weigh that against the comfort of moving into a known situation, and the answer is obvious … get a home inspection!
a. A standard homeowners policy protects against fire, lightening, wind, storms, hail, explosions, riots, aircraft wrecks, vehicle crashes, smoke, vandalism, theft, breaking glass, falling objects, weight of snow or sleet, collapsing buildings, freezing of plumbing fixtures, electrical damage and water damage from plumbing, heating or air conditioning systems. Such policies are called “all risk” policies, which cover everything except earthquakes, floods, war and nuclear accidents. A basic policy can be expanded to include additional coverage, such as for floods and earthquakes and even workers’ compensation for servants or contractors. Home-based business-coverage, an increasingly popular rider, does not cover liability associated with the business. Insurance experts recommend that homeowners obtain insurance equal to the full replacement value of the home. On a 2,000 square foot home, for example, if the replacement cost is $80 per square foot, the house should be insured for at least $160,000.