Common Questions and Answers From First Time Home Buyers

Common Questions and Answers From First Time Home Buyers

Buying a home for the first time can be stressful. One of the best ways to ensure the process isn’t overwhelming is to be well educated and properly prepared.

Should I talk to my bank / lender before looking at homes?
The answer is YES! There are many reasons you should talk to your lender and get pre-approved before looking at homes. The primary reason being is you need to understand how much you can afford, and more importantly, what monthly payment fits your lifestyle. Your lender will also be able to talk about first-time home buyer programs. These programs vary based on your income & area you're looking to buy, but your lender will be able to educate you about the different programs they have available. They will also be able to discuss with you the costs that go along with buying a home. In many cases you will need to have additional funds set aside for those costs that may include your closing costs, appraisal costs, etc.

Why should I buy a home or rent?
Buying a home can be a great investment, and oftentimes, it is more cost-efficient to buy a home rather than rent one. With that being said, renting can be a better option for some, depending on the circumstances. A couple questions you should ask yourself before deciding to buy a home.... How long are you planning on staying in the home? If the answer is less than a year, it’s likely a better choice to continue renting. If the answer is a few years, it may make more sense to purchase a property and build equity during those years. Another question to ask is if you’re ready to take on the additional responsibilities of owning a home. Once you own a home, there is routine maintenance that should be done around the home, are you ready to take on those tasks? Do you have the time and resources to do so?

How long does it take to buy a home?
Once your offer is accepted, the average timeline from acceptance to closing is 30-45 days. In this timeframe, depending on the location and agreement between the buyer and seller, a home inspection, appraisal and loan would need to be finalized prior to your closing. Take this timeline into consideration when searching for a home. Even after you find your dream place, plan for some extra weeks until you can officially close and move in.

What is earnest money?
Earnest money is made in good faith money, due up-front, to convey to the seller that your offer is genuine and you're serious about completing the terms of the offer. The check is usually due within 3-5 days of the sellers accepting your offer and is held in a trust account or escrow account, and later is applied to your down payment and closing costs. It is important to note, if you as the buyer were to back out of the offer for a reason not supported by one of the contingencies, you may be subject to lose all or some of your earnest money. Talk to your agent about the specifics of each contingency, so you understand them fully before submitting your offer.

Some homes are listed as “Pending” or “Contingent.” Are they available? 
These statuses mean there is an offer that has been accepted by the sellers. In most cases, it doesn't make sense to tour or offer on a home with an accepted offer, unless you're interested in being in the secondary position. There are a number of things that can cause the sale to fall through. If the primary offer falls through due to one of the conditions not being met, a secondary offer could be moved into the primary position by the sellers. This isn't common, but it does happen from time to time.

Do I need an agent when buying a home?
It is possible to buy a home without an agent, but it is quite a bit more difficult. Real estate agents receive training and state licensing to help buyers & sellers. They’re up to date on the current market conditions, state rules / regulations and know the ins and outs of the transaction & closing process. Usually, they are in contact with industry professionals - lenders, appraisers, inspectors, contractors, and others to make your buying process go smoothly. They’ll be able to help you draft an offer, present your offer and help negotiate on your behalf. 

Buying a Home is Exciting
Being a first-time home buyer is exciting. This list of questions and answers is not all encompassing but provides a high-level overview of what to expect when thinking about buying a home. Being prepared and well educated can make a huge difference. Learning the process will help make your purchases process less intimidating, also having the right agent on your team to answer those questions can help tremendously in your home buying process. 

Are you ready to buy? The Solomon Group has agents ready to help you find your dream home! Reach out today, we’re happy to help!

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