Am I ready to be a homeowner?

If you think you are prepared to take the leap from renter to homeowner, then it is important to take a financial inventory of your lifestyle, debts and assets. Are you gainfully and reliably employed? Lenders look for those who will pay their loans payments on time, and consistent income is a must to qualify. Do you have enough money saved to put up a down payment? The down payment should be a minimum of five to 10 percent of the real estate property purchase price. Your credit score should be in at least fair to good shape and only contain a few outstanding debts that can be easily resolved. Your payment history should show a good record of payments being made on time.


What is the lender's formula?

The lender's formula is a complex configuration of debt-to-income ratio, available credit and score, credit history and the amount of available cash for the down payment and closing costs, as well a few other numbers.


What do I look for in homes?

Is the home large enough to fit your needs, both now and in the future? Is the structure compromised in any way? Imagine the home throughout the seasons with all of your belongings inside. Ask questions of the homeowner. Are the appliances going to stay? What, if any, have been ongoing maintenance issues? What is the neighborhood like? What is the reputation of the local schools? Some of these details can only be found out by talking to the homeowners themselves, so don't be afraid to ask.


Do I need a home warranty?

The decision to invest in a home warranty for the purchase is entirely up to you, the buyer. A home warranty provides coverage on appliances and specific items for a specific amount of time, typically at least a year. Many first-time home buyers purchase a home warranty so they are covered immediately after making their home purchase. This is smart, as finances may be thinner during this time, and in the event of unexpected repairs or replacements, the warranty will kick in to save the day.


What is pre-qualifying versus pre-approval?

Before setting up any appointments to view homes for sale with a real estate agent or homeowner, find out the likelihood of you being able to get approval for a home loan. In pre-qualification, you are given an estimate of what you may be able to borrow based on limited financial information provided in a form. This is an easy way to determine how much you could possibly spend on your real estate home purchase. To be pre-approved means a financial institution has agreed to work with you and has already taken a deep view into your financial situation. Pre-approval gives potential home buyers more solid answers on how much they can afford during the home buying process.


What should I expect at closing?

After everything is checked off the list and closing time arrives, you will first need to verify that the homeowner's insurance premium is paid. Take this documentation to present to the real estate closing agent along with the paid receipt. The seller will provide the home inspection and home warranty paperwork. In most cases, the buyer is responsible for the lender's closing costs (unless there has been another agreement made in the contract between the seller and buyer). These costs include property taxes, interest, origination, survey or recording fees and title insurance.


Should I talk with a bank before looking at homes?

The answer to the question is YES! There are tons of reasons why you should talk with a bank and get pre-approved before looking at homes. First and foremost, talking with a bank before looking at homes can help you understand exactly how much you can afford. There is no reason to look at homes that are listed for $250,000 if you can only afford up to $200,000.
If you’re a first time home buyer, talking with a bank before looking at homes is strongly suggested, as there are many first time home buyer programs available. These programs can vary from state to state and county to county, so knowing exactly what’s available to you, is critical.

Another important reason to talk with a bank before looking at homes is so you understand exactly what costs are associated with buying a home. There are many home buyers who don’t understand the difference between a down payment, pre-paid items, and escrows, which can be thoroughly explained by a mortgage professional. A mortgage professional can give you advice on the type of financing you should be looking to obtain and also whether or not you should request the seller to contribute towards your closing costs, also known as a seller’s concession.


Do I really need a Realtor when buying a home?

When buying a home, it’s strongly recommended you have a Realtor. There are many reasons why you should have a Realtor represent your best interests when buying a home. Keep in mind, all Realtors are not the same! When choosing a buyers agent, make sure you know how to properly interview prospective Realtors when buying a home.

Attempting to buy a home without a Realtor can really make the home buying process more difficult. Having a Realtor is always recommended when buying a home. One thing not to do when buying a home is calling the listing agent because you don’t want to “bother” your Realtor. This is one thing that real estate agents hate.


Who pays the Realtor fees when buying a home?

One reasons why buyers ask the question about the need of having a Realtor when buying a home is because they don’t understand who pays the Realtor fees when buying a home. There are no guarantees, however, in most cases the seller pays the Realtor fees.


How much needs to be done to my house before putting it on the market?

"Many sellers have extreme anxiety over the thought of having to clear out and fix up their home, so much so that it can prevent them from putting the place on the market in the first place," says Alyssa Blevins with Pierce Murdock Group. But in most cases, there's no need to panic here—or to overshoot your goals. "Very often, there's far less to do than homeowners think." So before spending months and millions (figuratively) upgrading your place—or just throwing up your hands and giving up before you begin—show your home to a Realtor®. You might be pleasantly surprised by your current sales prospects.


Is staging really important?

On average, a staged home sells 88% faster—and for 20% more money—than a home that's left as is. The reason it works, of course, is it gives buyers a "stage" onto which they can play out their home-owning fantasies and envision themselves living in your home. "Choose neutral paint colors and remove any family photos," says Johnson. Give would-be homeowners a blank canvass that they can mentally fill with their loved ones and themselves.


Is a private home inspection worth the money?

It absolutely is! For most people, a home is the largest investment they will ever make and protecting that investment by spending a few hundred dollars is well worth it. An inspector checks the safety of your potential home. Home inspectors focus especially on the structure, construction, and mechanical systems of the house and will provide you with a report of any repairs that need to be take care of, suggestions on how to maintain your home, and most importantly, will provide you with peace of mind. Some sellers will allow you to make the sale of the home contingent upon completion of a satisfactory home inspection. In this case, the seller will either make the proper repairs or compensate you for the repairs that need to be made.

Please be aware that the purpose of a home inspection is to point out repairs that can affect the safety and resale value of your home, not cosmetic blemishes.

Be sure to choose a home inspector wisely. Be sure to ask questions and find out how many years they have been in the business. Talk to your family, friends, and realtor to see if they can recommend one to you.


What are the two most important factors when selling a home?

Price and condition are the two most important factors in selling a home, even in a down market. The first step is to price your home correctly. Use comparative sales information from your agent, or pay for a professional appraiser to objectively evaluate your home's worth. Second, go through the house and repair any obvious cosmetic defects that could deter a buyer.

In a down market, you may have to consider lowering your price and/or making a major repair, such as replacing the roof, in order to lure a buyer. Also, make sure that your home is getting the exposure it deserves through open houses, broker open houses, advertising, good signage and a listing on the local multiple listing service or online listings provider.


What is radon?

Radon is a radioactive gas released from the normal decay of uranium in rocks and soil. It is an invisible, odorless, tasteless gas that seeps up through the ground and diffuses into the air. In a few areas, depending on local geology, radon dissolves into ground water and can be released into the air when the water is used. Radon gas usually exists at very low levels outdoors.

Radon can enter homes through cracks in floors, walls, or foundations, and collect indoors. It can also be released from building materials, or from water obtained from wells that contain radon. Radon levels can be higher in homes that are well insulated, tightly sealed, and/or built on uranium-rich soil. Because of their closeness to the ground, basement and first floors typically have the highest radon levels.

Any home can have a radon problem. This means new and old homes, well-sealed and drafty homes, and homes with or without basements. In fact, you and your family are most likely to get your greatest radiation exposure at home. That is where you spend most of your time.

Nearly 1 out of every 15 homes in the United States is estimated to have an elevated radon level (4 pCi/L or more).


What makes up closing costs?

Closing costs are usually made up of the following:

  • Attorney's or escrow fees (yours and your lender's if applicable)
  • Property taxes (to cover the tax period to date)
  • Interest (paid from date of closing to 30 days before the first monthly payment)
  • Loan origination fee (covers lender's administrative cost)
  • Recording fees
  • Survey fee
  • First premium of mortgage insurance (if applicable)
  • Title insurance (yours and lender's)
  • Loan discount points
  • First payment to escrow account for future real estate taxes and insurance
  • Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)
  • Any documentation preparation fees