Frequently Asked Questions from Buyers & Sellers

What is the first step of the home buying process?

Getting pre-approved for a mortgage is the first step of the home buying process.
Getting a pre-approval letter from a lender gets the ball rolling in the right direction.

Here’s why:
First, you need to know how much you can borrow. Knowing how much home you can afford
narrows down online home searching to suitable properties, thus no time is wasted
considering homes that are not within your budget. (Pre-approvals also help
prevent disappointment caused by falling in love with unaffordable homes.)
Second, the loan estimate from your lender will show how much money is required for the
down payment and closing costs. You may need more time to save up money,
liquidate other assets or seek mortgage gift funds from family. In any case, you will have a
clear picture of what is financially required.

Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to
both your real estate agent and the person selling their home. Most real estate agents will require a pre-approval before showing homes – this is especially true at the higher end of the real estate market; sellers of luxury homes will only allow pre-screened (and verified) buyers to view their homes. What’s more, by limiting
who enters their home, sellers are given extra security from potential thieves trying
to case the home (like identifying security systems, locating expensive artwork or other
high-value personal property).

How long does it take to buy a home?

Under normal market conditions, the average time to complete the sale of a home is 30
to 45 days. Though, well-prepared home buyers have been known to purchase properties
faster than the averages.

Market conditions are a major factor in how fast homes are sold. In hot markets with a
lot of sales activity, buying a home may take a little longer than normal. That’s because several
parties involved in the transaction get behind when business suddenly picks up.
For example, a spike in home sales increases the demand for property appraisals and home
inspections, yet there will be no increase in the number of appraisers and inspectors
available to do the work. Lender turn-around times for loan underwriting can also
slow down. If each party involved in a deal takes a day or two longer to get their work
done, the entire process gets extended.

What is a seller's market?

In sellers’ markets, increasing demand for homes drives up prices. Here are some of the
drivers of demand:
• Economic factors – the local labor market heats up, bringing an influx of new
residents and pushing up home prices before more inventory can be built.
• Interest rates trending downward – improves home affordability, creating more
buyer interest, particularly for first time home who can afford bigger homes as
the cost of money goes lower.
• A short-term spike in interest rates – may compel “on the fence” buyers to make
a purchase if they believe the upward trend will continue. Buyers want to make a
move before their purchasing power (the amount they can borrow) gets eroded.
• Low inventory – fewer homes on the market because of a lack of new
construction. Prices for existing homes may go up because there are fewer units

What is a buyer's market?

A buyer’s market is characterized by declining home prices and reduced demand.
Several factors may affect long-term and short-term buyer demand, like Economic
disruption – a big employer shuts down operations, laying off their workforce.
• Interest rates trending higher – the amount of money the people can borrow to
buy a home is reduced because the cost of money is higher, thus reducing the
total number of potential buyers in the market. Home prices drop to meet the
level of demand and buyers find better deals.
• A short-term drop in interest rates – can give borrowers a temporary edge with
more purchasing power before home prices can react to the recent interest rate
• High inventory – a new subdivision and can create downward pressure on prices
of older homes nearby, particularly if they lack highly desirable features (modern
appliances, etc.)
• Natural disasters – a recent earthquake or flooding can tank property values in
the neighborhood where those disruptions occurred.

How much do I have to pay an agent to help me buy a house?

Home shoppers pay little or no fees to an agent to buy a home.

Here’s why:
For most home sales, there are two real estate agents involved in the deal: one that
represents the seller and another who represents the buyer.
Listing brokers represent sellers and charge a fee to represent them and market the property.
Marketing may include advertising expenses such as radio spots, print ads,
television and internet ads. The property will also be placed in the local multiple listing services
(MLS), where other agents in the area (and nationally) will be able to search and find
the home for sale.
Agents who represent buyers (a.k.a. buyer’s agent) are compensated by the listing broker
for bringing home buyers to the table. When the home is sold, the listing broker splits
the listing fee with the buyer’s agent. Thus, buyers don’t pay their agents.

What kind of credit score do I need to buy a home?

Most loan programs require a FICO score of 620 or better. Borrowers with higher credit
scores represent less risk to the lender, often resulting in a lower down payment
requirement and a better interest rate. Conversely, home shoppers with lower credit
scores may need to bring more money to the table (or accept a higher interest rate) to
offset the lender’s risk.

How much do I need for a down payment?

The national average for down payments is 11%. But that figure includes the first
time and repeat buyers. Let’s take a closer look. While the broad down payment average is 11%, first-time homebuyers usually only put
down 3 to 5% on a home. That’s because several first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members
in the form of a gift.

Some programs require even less. VA loans and USDA loans can be made with zero
down. However, these programs are more restrictive. VA loans are only made to former
or current military service members. USDA loans are only available to low to-middle
income buyers in USDA-eligible rural areas.

For many years, conventional loans required a 20% down payment. These types of loans
were typically taken out by repeat buyers who could use equity from their existing
home as a source of down payment funds. However, some newer conventional loan
programs are available with 5% down if the borrower carries private mortgage
insurance (PMI).

Should I sell my current home before buying a new one?

If the built-up equity in your current home will be applied to the down payment on the
new home, naturally the former will need to be sold first.
Some home buyers decide to turn their current home into an investment property,
renting it out. In that case, the current home will not need to be sold. However, your loan
advisor will still need to evaluate your risk profile and credit history to determine whether
making a loan on a new home is feasible while retaining title to the old home.
Buyers often have a short time frame to sell their current home when relocating to a
new city because of a job transfer. If you are moving but taking a position with the same employer,
check to see if they offer relocation assistance to help offset some of the

What is earnest money?

When you make an offer on a home your agent will ask for a check to accompany it
(checks are the same as cash, and the deposit is typically 1% to 2% of the purchase price).
Earnest money is made in good faith to demonstrate – to the seller – that the buyer’s
offer is genuine. Earnest money essentially takes the home off the market to anyone
else and reserves it for you.

The check is deposited in a trust or escrow account for safekeeping. If a deal is struck,
the earnest money is applied to the down payment and closing costs. If the deal falls through, the money is returned to the buyer.
Important: if the terms of a deal are agreed upon by both parties, but then the buyer backs
out, the earnest money may not be returned to the buyer. Ask your agent about the
ways to protect your earnest money deposit and the ways to protect it – such as offer

What if my offer is rejected?

Sellers can flat-out accept or reject an initial offer. But there a third path that is quite
common, sellers can initiate a counteroffer. Remember this: a deal isn’t dead until it’s
dead. So, if a counteroffer is proffered by the seller, you’re still in the game. You and
your agent just need to review it to determine whether the counteroffer is acceptable. If
so, then approving it closes the deal immediately. Keep in mind, offers and
counteroffers can go back-and-forth many times; this is not unusual. Each revision
should bring both parties closer together on the terms of the deal.

Should I order a home inspection?

Yes! Home inspections are required if you plan on financing your home with an FHA or
VA loan. For other mortgage programs, inspections are not required. However, home
inspections are highly recommended because they can reveal defects in the home that
are not easily detected. Home inspections bring peace of mind to one of the biggest
investments of a lifetime.

Do I really need a Realtor® to sell my home?

One of the most common questions that sellers have when selling a home is if it’s worth
it or not to hire a Realtor®. Now certainly I’m biased to this question, but there are way
more reasons why it’s worth hiring a Realtor® rather than attempting to sell a home by

The number one reason why hiring a Realtor® is worth it is because of the knowledge a
top Realtor® will have of the local real estate market. By having a strong knowledge of
the local market, a real estate agent knows the importance of properly pricing a home
for sale. A home that is overpriced will be at a severe disadvantage when comparing to
other homes for sale in an area and potentially may not sell.
Bottom line, if you’re asking yourself if hiring a Realtor® to sell my home worth it, the
answer is absolutely!

What are the costs of selling my home?

Many home sellers don’t realize there are costs to sell a home. Since a home sale is one
of the biggest transactions someone will be involved in, it’s critical to know what all the
costs involved are. Below are some of the most common costs of selling a home.
1. Brokerage fees/real estate commissions
2. Seller concessions (if applicable)
3. Title search
4. Instrument survey
5. Home warranty (if applicable)
6. Transfer taxes
7. Capital gain taxes
8. Costs of various repairs from inspections
9. Existing mortgages or home equity loans
3. What Should I Do to Prepare My Home for The Market?
Home sellers who prepare their homes for the market, in most cases, will sell their
home for more money and in a shorter amount of time. There are certain steps that
should be followed to make sure a home is market ready.
Not only is being market ready important there are also steps to ensure the home is
“show ready.” There is only one chance to make a first impression with a buyer. There
are many home selling checklists that are available for sellers to ensure their home is
not only market ready but also show ready.

How long will it take to sell my home?

The longer it takes to sell a home is not concrete. There are many factors that
contribute to the amount of time it will take to sell a home.
For those home sellers who are wondering how long it takes to sell a home, below
are some of biggest contributing factors that impact the amount of time it takes from
listing date to closing date.
1. The current state of the real estate market (seller’s market, buyers market, balanced market)
2. Listing price
3. Real estate marketing strategies used
4. Number of inspection contingencies
5. Buyers mortgage approval process
6. The closing the document review process

What should I avoid when selling my home?

Home sellers who are concerned about what they need to avoid are taking the sale of
their home very seriously, and rightfully so. There are certain home selling blunders that
some sellers make that can kill a home sale before it even gets going.
It’s important to avoid these home selling mistakes such as hiring the wrong agent,
pricing a home too high, not accommodating showings, and being unrealistic with
negotiations. By avoiding these items when selling a home, a seller exponentially
increases the chance of a successful sale of their home.

Should I be present when buyers view my house?

There is not any situation in which this is appropriate. Having the owner in the house
makes the buyers uncomfortable. They feel as though they can’t make comments or ask
questions that could be offensive. The owner—who has a history and attachment to
the house—has the tendency to argue if a potential buyer makes a comment that could
be a little negative. This can turn off buyers and lose you offers.

What is the agent's commission?

While the commission can vary, it is typically 6% of a home’s sale—and that’s
usually shared with the buyer’s agent. But what’s implied by this question is “What are
Realtors doing to earn that fat check?” Here are some facts to keep in mind: Unlike
lawyers who get paid by the hour, or doctors who are paid by the appointment, listing
agents don’t get paid unless they make a sale. For every hour an agent spends with a
client, he or she will typically spend nine hours on average working on that client’s
behalf doing everything from networking to finding potential buyers to filling out

What should I disclose to potential buyers?

When selling a home, it’s important you disclose to potential buyers anything you are
aware of in your home. Nobody likes “getting the raw end of a deal” when it comes to
buying a home, car, or anything for that matter. If you’re aware of defects with a roof,
appliance, or home in general, you’re always going to be better off being honest and
upfront. If you’re aware of defects, whenever possible, fixing them before going on the
market is best. This can avoid potential issues and/or lawsuits once your home is under
contract, after inspections, and even years after you have sold your home.

How do you determine how much my home is worth?

There are a handful of methods that Realtors use to determine the value of a
home. The most common method for determining the value of a home is by completing
a comparative market analysis. A comparative market is an in-depth evaluation of
recently sold “comparable” homes in the past 3-6 months. A comparative market
analysis, also known as a “CMA,” isn’t a crystal ball that determines what a home will
sell for, however, if performed by a top Realtor, it should greatly narrow the sale price

A professionally completed “CMA” will take into account many features of not only a
home but also the local area and neighborhood. Considerations that a professionally
completed “CMA” include but is not limited to:
1. Square footage
2. Number of bedrooms
3. Number of bathrooms
4. Upgrades to kitchen
5. Window quality
6. Roof age
7. Lot features
8. Location; primary or neighborhood street
9. Style of residence
10. Flooring type

Can I determine how much my home is worth from an internet website?

The answer to this frequently asked question is NO! Anyone who has bought a
home sold a home or just looked at homes, has heard of websites such as Zillow
and Trulia. These are also commonly referred to as third-party real estate
websites. Third-party real estate websites are not local to every real estate market.
These third-party real estate websites provide estimates of home values for practically
any home in the United States. How is it possible that a third-party website that is
headquartered in California or Florida can provide an accurate home value for a home
located in Rochester, NY? It’s not! These third-party websites, such as Zillow and Trulia,
use computer generated home values based on calculations and formulas.
These websites providing inaccurate estimates (or “Zestimates”) can create a false sense
of hope and lead to frustration. A home seller who is told their home is worth $20,000
less than the online estimate is going to be understandably upset. It’s critical that when
selling a home, the value is determined by a top Realtor in your local area, not an
internet website!

What time of year is best to sell a house?

Spring is a popular time to sell a home because as the weather gets warmer, buyers are
more willing to go out and explore. The benefit of selling in the spring is that the
weather will generally cooperate. Therefore, if your house offers nice curb appeal, it’ll
be most evident during that season. Furthermore, preparing your home for a sale might
be easiest during the spring, assuming you’d most likely rather not be repainting your
fence or staining your deck when it’s boiling or freezing outside. (Keep in mind that
certain exterior maintenance items, including the just-mentioned examples,
often can’t be performed in extreme temperatures anyway.)
Another good reason to sell your house in the spring is that families with children
generally prefer to move at a time when the school year won’t be disrupted — namely,
summer. However, it usually takes 30 to 60 days or more from the time a home contract
is signed to the time its actual closing date arrives. Therefore, families eager to move
during the summer will need to find and make offers on their homes several months

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