You’re ready to buy – or maybe you’re just ready to start seriously thinking about buying. There’s a lot you can do to prepare. With so much information available at your fingertips, you may already be doing a lot of your own research. Here are a few things to keep in mind while you get started.
How does my offer get presented to the seller?
In today's electronic world, offers are sent via email to the seller's agent. I will call the agent to let them know it's coming and tell them a little bit about you and the details of your offer. Then I will follow up with the agent again to confirm receipt of your offer.
Does it cost me money to make an offer?
When you write the offer on the home you’ve chosen, you will be expected to include an earnest money deposit. The deposit is a sign of your good faith that you are seriously interested in buying the home.
Where does my earnest money go?
Once the buyer and seller have a mutually accepted offer, the earnest money is deposited into a trust account. That deposit becomes a credit to the buyer and becomes part of the purchase expense.
Is that all the money that’s involved?
Some lenders require the cost of the appraisal and credit report at the time of the loan application.
Can I lose my earnest money?
Real estate contracts are complicated legal transactions. This is another area where having a knowledgeable and professional agent is a necessity. Rarely does the buyer lose the earnest money. Most often, if the transaction falls apart, there are circumstances beyond the buyer’s control that cause it to happen. If the buyer willfully decides, however, that they no longer want to buy the house and has no legal reason for rescinding their offer, then the seller has the right to retain the earnest money.
What happens if I offer less than the asking price?
If you offer less money, the seller has three options.They can accept the lower offer, counter your offer or reject it completely. Remember that there could be another buyer who is also interested in the home you’ve chosen. If they happen to write an offer at the same time you do, the seller will have two offers to compare. There are usually many aspects of each offer to consider, but ultimately the seller will want to accept the best and most complete offer. In active real estate markets, homes often sell for their listed price. In hot markets, there may be many buyers vying for the same house, which sometimes drives the final sale price above the original listing price. As a real estate professional, I can help you plan your strategy, based on the current real estate market in our area.
What if I need to sell my home before I buy a new one?
To put yourself in the best negotiating position before you find the new home you want, hire a qualified real estate agent to help you put your home on the market. Once you write an offer on a new home,your offer will be “contingent” upon the sale of your home. A buyer in this position may not have the same negotiating power as one whose home has already sold (or at least has an accepted offer). The seller may be hesitant to accept your offer because there are
too many things that must happen before the sale
The amount of the mortgage based on the purchase
price, minus the down payment.
Cash that the buyer provides the lender as their
portion of the purchase price. The down payment
is considered the buyer’s equity (or cash investment)
in their home.
Fees charged by the lender to offset their interest
rate, if it’s below the prevailing market rate. One point
equals one percentage point—so one point on a
$100,000 loan would be $1,000.
The amount paid for the lender’s appraisal
of the property.
CREDIT REPORT FEE
The fee charged by the lender to obtain a credit
report on the buyer.
TITLE INSURANCE FEE
A one-time premium that a buyer pays for protection
against loss or damage in the event of an incorrect
search of public records or misinterpretation of
title. The title insurance policy also shows what
the property is subject to in terms of liens, taxes,
encumbrances, deed restrictions and easements.
The amount a buyer pays the escrow company
or closing agent for preparing papers, accounting
for all funds and coordinating the information
between all parties involved in the transaction.
A general term for all the estimated charges associated
with the transfer of ownership of the property.
The amount of interest due on the loan during the
time period between closing of escrow and the first
mortgage payment, due at the time of closing.
The estimated house payment, including principal,
interest, taxes and insurance.
PRINCIPAL AND INTEREST
The loan payment, consisting of the amount to be
applied against the balance of the loan, and the interest
payment, which is charged for interest on the loan.
TOTAL CASH REQUIRED
The total amount of cash the buyer will need,
including down payment and closing costs.
PREMIUM MORTGAGE INSURANCE (PMI)
Insurance for the lender, to cover potential losses
if the borrower defaults on the loan.
Contact me today and I will be glad to assist you!