Common Homebuying Questions & Answers
Updated: Oct 19, 2022
What's the first step?!
Unless you're paying cash for your home, the very first thing you're going to want to do is meet with a lender. They can do a quick overview of your debt-to-income ratio and perform a soft pull on your credit report to determine whether or not you're pre-qualified for a home and at what amount. Your realtor will use this pre-qual letter to help you search for eligible properties (based on your purchase price and loan type) and then submit it to the listing agent whenever you write an offer. This shows the seller that you've started the financing process and you are pre-qualified for a mortgage.
What does a Realtor do and how do they get paid?
As a Realtor, we will assist you through the entire homebuying process. We'll schedule and attend showings, provide market updates, share knowledge about homes, perform and review comps, discuss offer strategies, negotiate on buyer's behalf, work with the lender and title company, get repair items in writing, problem-solve along the way, remind buyers to schedule utilities, review closing figures, do the final walk-through, attend the closing and everything in between!
We get paid by the seller. The listing agent has a contract with the seller for a certain percentage of the sale price and then the listing agent offers a portion of that percentage to the buyer agent. Sometimes there's a difference between this number and what the buyer signed a contract with their buyer agent for. In this case, the buyer is only responsible for that difference (usually .5%-1%).
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Where do the fees come from?
There are various fees involved when buying a home. Some of these include loan origination fees and closing costs. If you want to know more about everything that's included in closing costs, check out our other blog post title "What are Closing Costs?".
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How long does it take to purchase a home?
The search period can take a various amount of time. Sometimes it's the first house a buyer looks at, other times it's two years later. But once you go under contract on a property, it takes 30-45 days on average to get to the closing table.
How much $$ do I need for a down payment?
Well, that depends! But what I can tell you is that you're not required to have 20% for a down payment. That's the number that a lot of people think it has to be and that's the number that I was taught before becoming a licensed Realtor. It all depends on what type of loan you and your trusted lender have decided is best for you. If you're using a VA loan, you can have as little as $0 down. If you're going FHA, you only have to put 3.5% down. There are other options out there besides putting a down payment that's 1/5 of your home price. Talk to your lender! Don't have one? We will happily provide contact information for lenders we trust.