FAQ

Frequently asked questions

As you might imagine, real estate agents field quite a few questions every day. People are naturally curious, and it’s an agent’s job to guide folks through the often-complex world of home buying and selling. You might also imagine that some questions about real estate come up more often than others. Whether you’re a first time buyer or repeat buyer who could use a refresher on how deals get done, here are some answers to the questions that come up most often.

What is the first step in buying a home?

The absolute first step is to get approved for a mortgage. Without being approved for a mortgage it will be quite difficult, if not impossible, to purchase a new home.

Getting pre-approved for a mortgage is generally a good idea. Pre-approval involves a firm promise on the part of the lender to issue you a mortgage, following an exhaustive investigation into your finances.

Pre-approval thus shows sellers that you are a serious, qualified buyer and gives them confidence you won’t run into problems getting financing during the home purchase process. This can give you an edge in a competitive housing market. Many home buyers confuse pre-approval with pre-qualification.

Pre-qualification is simply a lender’s recommendation of the types of loans you might qualify for, based on self-reported financial information. Pre-approval is taken much more seriously by sellers because a qualified lending professional verifies all of your information.

To determine how much you’re pre-approved for, the lender will consider your credit score, credit history, debt-to-income ratio, employment history, and assets and liabilities.

In recent studies, it took buyers an average of 4.5 months to choose a home and make an offer. The buying process itself, which begins when an offer is accepted, takes about 30-45 days to finalize.

However, several factors can affect the buying process, including the property’s location, buyer demand, economic trends, and other variables. Before closing, you’ll also need to:

  • Order a home inspection
  • Get an appraisal
  • Conduct a title search
  • Finalize mortgage details
  • Review closing documents

In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:

  1. Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
  2. Interest rates trending downward – improve home affordability, creating more buyer interest, particularly for first-time home buyers who can afford bigger homes as the cost of money goes lower.
  3. 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.
  4. 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 available.

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 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.
  • 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 changes.
  • High inventory – a new subdivision 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.

Yes, almost everything in real estate is negotiable. Typically, there is a difference between a home’s list price and how much it actually sells for. The current market’s saturation will determine how much wiggle room there is for negotiation.

If you’re on the buyer’s side, expect the house to be able to be purchased for less if there is a lower demand than supply in the market. Vice versa, if you’re on the seller’s side expect it to usually sell for less. That being said, you never know who else is house hunting. Sometimes people will swoop in and offer the exact asking price.

Yes, but you may lose earnest money (basically, a security deposit given to the seller upon signing a contract). You can also face legal consequences if you back out of the agreement for a reason not outlined in the purchase agreement. This document outlines important details, such as repairs the seller is responsible for and contingencies of the real estate deal.

However, there are certain scenarios where breaking a purchase agreement is understandable. If you lose your job, can’t sell your current home, or can’t get approved for a mortgage, it’s best to wait until you reach financial stability before buying. Other issues with the home, such as a failed home inspection, unrepaired problems, or difficulty with transferring the title, are also acceptable reasons to back out of an agreement.

Working with a real estate agent is a huge advantage in helping a buyer find the home of their dreams. Buying a home involves cooperation and a leap of faith from the buyer to the agent.

As real estate professionals, we understand that when purchasing a property, clients often have questions about the neighborhood and surrounding environment. However, it is important to note that there are rules in place that prevent us from providing personal opinions or steering clients toward specific areas or neighborhoods.

That being said, we can certainly assist you in obtaining important information about the local economy, security, crime statistics, taxes, and available amenities. By conducting thorough research and gathering relevant data, we can provide you with the necessary information to help you make an informed decision about areas and neighborhoods that align with your preferences and needs.

Our website features a blog section where we regularly share informative articles and insights about the real estate market. You can also subscribe to our newsletter to receive updates directly in your inbox. Additionally, our agents are always available to provide you with the latest market information and answer any questions you may have.