You asked. We answered.
Buying a home is thrilling, scary, sometimes weird, often epic, and never dull. You’re ponying up a huge amount of cash for a place you’ll inhabit for years to come. As such, you’re bound to have a lot of questions throughout every step of the process. So to head you off at the pass, here are the answers to some frequently asked questions. Of course, if this is only meant to serve as a preliminary guide. We're happy to help you through the whole process so please give us a call with your additional questions!
Q: What home can I afford?
That depends, of course—on your income and other financial obligations; plug them into realtor.com’s Home Affordability Calculator for a ballpark figure. And do it before you start shopping, says Alyssa Blevins of Pierce Murdock Group in Alexandria, VA. “If you see houses you love outside your price range, it opens you up to disappointment,” she says. Meet with a lender to get pre-approved for a home loan (added bonus: pre-approval makes you much more attractive to sellers).
Q: Can I buy a home and sell my current one at the same time?
Yes, you can—but it’s the real estate equivalent of walking a tightrope. “This is one of the trickiest questions to answer,” says Cedric Viquerat of Coldwell Banker Residential Real Estate in Bradenton, FL. On the one hand, if you buy a home before you sell the one you’re in, you’re overextended financially; if you sell before you buy, you might need to rent awhile before finding a new place. But there are ways to do both at once, and one option is to instate a “sale contingency” in your contract. This means you only agree to buy a home if you can sell the one you’re in. The only downside is if your seller doesn’t agree (which is possible if they want the timing set in stone).
Q: How many homes should I see before making an offer?
Up to you, sport! While home shoppers these days can look at hundreds of homes online, they only hoof it to check out 10 homes on average before they put in an offer. But keep in mind, “This varies tremendously for each person,” says Will Johnson, a Realtor® in Hendersonville, TN, and founder of Sell and Stage. “Some people find their home within hours of hunting. For others, it takes months.” If you want to streamline the process, it can help to really hone in on a particular neighborhood you’re keen on; that said, if you feel limited by your options, it may be time to expand to surrounding areas.
Q: What do you think the seller will accept as a fair price?
As a rule of thumb, knocking 5% off the list price won’t ruffle any feathers. If it’s been sitting on the market for months, you can venture below that, but the bottom line is, “You never know how low a seller will go, as they have different motivations for selling,” says Marc Castillo of Coldwell Banker in Atlanta, GA. If the sellers are eager to move, you could luck out and score a deal.
Q: How do I know if the property is a good deal?
While there’s no crystal ball on whether a certain home is a bargain and will appreciate, rest assured that with research, you can keep surprises to a minimum. The best way is to check out comps—what similar properties are selling for in the area—“and whether those prices have been going up or down in the recent past,” says Felise Eber, a Miami Beach real estate associate with Coldwell Banker.
Q: How quickly can I close?
“Typical escrow periods are 30 to 45 days,” says Rina Camhi, founder of 10MinRealty. “This gives you enough time to do the investigation on the property and get a loan completed.” And yes, this due diligence counts (see our next point).
Q: Should I get a home inspection?
While buyers often wonder if a home inspection is truly necessary, most Realtors unequivocally say yes, yes, and yes. “A home inspector takes a weight off of your shoulders by looking into the condition of the roof, electricity, heating and air, plumbing,” says Johnson. “Ensuring these things work prevents you from paying to fix them in the future. If some things are not up to par, you can negotiate with the seller to get those fixed before you sign the paperwork.”
Q: When can I back out if I change my mind?
While buyers can always back out of a deal, doing so without good reason may forfeit their earnest money (the cash put down to secure the offer, typically around 1%-2% of the home’s price). But there are some ways to walk with your earnest money in hand.
“Contingencies are great loopholes,” says Bridges. “For example, upon an unsatisfactory home inspection, the buyer can ask for their deposit back. Another loophole is ‘subject to appraisal.'” That means you can back out if the lender for your loan doesn’t think the property is worth what you offered.
The questions and answers were originally published on realtor.com.