Top 10 Questions Buyers Ask Me
Some buyers are just plain shy when it comes to asking simple questions, but when they do, I always get these same questions over and over.
- I can find the homes I like on the internet, but I really don't know what to do next.
Here's the real process, and if you don't follow it, you may not get the home you want! The very first thing you need to do is actually talk with a lender of your choice if you are going to get a loan. The item you are after is a "pre-qualification" letter, sometimes referred to as a pre-approval letter, although those two words actually mean something different but are loosely used the same. Try bidding on a home without a pre-qualification letter and you may possibly soon find out that a pre-qualified buyer just took it from under your feet! Lesson #1 is follow the steps: (1) Get pre-qualified FIRST (2) View homes with a good, informative, communicative Realtor® (3) Access all the market stats and the community your home is located in with your Realtor® (4) Place your offer (5) Be present during your home inspection and ask a lot of questions and (5) Make sure you are getting all the documents your lender needs from you in a timely manner. A good Realtor® can walk you through the process while a good lender can make your dream a reality.
- I don't think I have a great credit score at the moment, but I am interested in looking at a home.
Lesson #1 again is to follow the steps and get pre-qualified first. You need to know if your credit score will hold you back or not. The only way to know that is to try and get pre-qualified and actually find out.
- But I'm afraid I won't be pre-approved.
First of all, I'm glad that people call me and at least tell me their fear up front. After all, step #1 is to get pre-qualified, but buyers seem to hesitate as soon as they hear that. It's almost like putting a huge roadblock in front of them. However, if you can just get going and make a call to a lender, the action itself can carry you through the fear. It doesn't matter that your credit is dinged...know why? Because knowledge is power and it is more important to know exactly where you stand at this very minute. What most buyers don't know is that many lenders will work with you to repair your credit and let you know just how much longer it may take to get you to a point where they CAN lend to you. Wouldn't you like to know that, at least? It's a free consultation in most cases and you'll walk away a more informed buyer!
- Why not just call each Realtor® on each sign I see in front of each home that I am interested in viewing?
First of all, Realtors® like to have signs posted in the yards of their listings so that it not only advertises their seller's home is for sale now, but it also gets the buyers to call them direct. If you call the number you see on the listed sign, you are actually calling the agent that represents the seller. They will work hard to keep you as a buyer, whether you actually see that specific property or not. This is an important moment for the buyer, as you should size up your first communication with the Realtor® and decide whether this is a Realtor® that you would feel comfortable communicating with and one that displays a good knowledge of the local market. However, you must also be aware that they are representing the SELLER and if they engage with you, show you the property and you place an offer through that agent, that agent is now representing both of you as a DUAL AGENT. Dual agency is a fine line to walk. It is allowed in our Northern KY area, but you can see where this can get a little tricky. A dual agent is not supposed to share any confidential info from the buyer to the seller and visa versa. While some buyers think they can get a better "deal" by working with the listing agent, in reality most of the times you do not. The listing agent works on a commission and may be collecting both the sell side and buy side commissions on such a deal, called double dipping. So it's not hard to see the benefits of having your very own Buyer's Agent represent you in each and every offer you make.
On another note, calling the number you see on each and every listing sign in the yard is not a good idea, either. Now you would be engaging with many different listing agents all whom represent their respective sellers. You will find that one good Realtor is all you need, as they will always have your best interest forefront, know your needs and wants, help you stay on the right path, and provide you with pertinent information on each property. Their entire role is to look out for YOU. The listing agent's role is to look out for the SELLER.
- How much do I pay an agent and when do I pay them?
This answer is always music to my buyer's ears. Very simply, it is the seller who pays the Realtor's® commission, not the buyer. There are exceptions, however. You will know when you run into the exception because the Realtor® will address the exception right up front with you. In fact, you'll sign a contract stating that if the seller's paid commission doesn't add up to a certain amount, you'll pay your Realtor® the difference. This is used primarily to insure that on smaller cost properties, that the brokerage is not doing all the work for little pay.
- Can my parent's help pay my down payment for me?
Yes they can, but you must talk with your lender to confirm, as there are conditions that must be met.
- Can't I just contact the seller directly for the home I am interested in?
If the property is listed through a Realtor®, you would not be calling the owner directly, as they are under legal contract to have the listing Realtor® sell their property. Best to hook up right away with a knowledgeable Realtor® that can represent your best interests.
- How long does it take to close a deal on a home?
If you are getting a loan, allow 35-45 days AFTER a signed contract is in place. However, there are circumstances that can extend that time period and some that can shorten that period of time. Cash buyers can close in less than half that time, as they do not have to go through the loan process.
- Do I ride with the Realtor® when we are looking at homes?
It is best to meet the Realtor® at the first location and follow him/her in your own car to the next location.
- Can I get out of a contract?
Most contracts will always have 2 contingencies that allow you fall out of the contract. The first one is a home inspection. If you discover something during your home inspection that is highly undesirable and something you do not wish to deal with, you are allowed to exit the contract within the time frame of your home inspection period which is usually 7 to 10 days. Notice must be given in writing to the seller before the end of that period. This contingency is not to be used if you just decide on the spur of the moment that you no longer want the property. You are in a legal contract and there must be something that is of great consequence to you that would make you want to exit the contract during your home inspection period.
The second contingency is the financing contingency. If the bank finds out, after reviewing all the information and documents you provide them during the course of their processing (along with any new info that comes along during the underwriting stage) that they cannot lend to you because you do not meet all the bank's guidelines, then you must fall out of the contract simply because your loan would be denied. A "lender denial" letter is provided by the lender and the contract must be terminated.