Question About Buying a Home
How Much Home Can I Afford?
This is one of the most common questions people have when deciding to buy a home. Knowing what you can afford to spend on your new home depends entirely upon your financial situation – income, financial obligations, credit report, etc. The only way to know for sure is to meet with a lender who will use your information to pre-approve you for a loan.
What is the Difference Between Being Prequalified and Preapproved for a Loan?
If you’re prequalified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information you provide to the bank is accurate and true. This is not as strong as a preapproval.
If you’re preapproved, it means that you have undergone the extensive financial background check, which includes looking at your credit history, previous tax returns and verifying your employment – and the lender is willing to give you a loan, basically meaning you’re approved!
You will usually be provided an accurate figure which shows the maximum amount that you are approved for. Most sellers prefer buyers that have been preapproved because they know that there will not be any problems with the purchase of their home.
Do I Need a Real Estate Agent to Buy a Home?
Not technically, but it’s highly recommended. Would you perform surgery on yourself or would you go to a qualified doctor? Buying a home is one of the biggest financial decisions you will ever make. Real Estate agents are professionals who buy and sell homes on a regular basis and have the skills and knowledge to help ensure you get the best deal possible.
Besides, in most cases, the seller pays for your agent at closing. So, you’re likely to get professional representation for FREE.
I Own a Home. Can I buy a Home and Sell My Current One at the Same Time?
Yes – you definitely can, but it can be difficult. If you buy a new home before selling your current home, you may find yourself overextended financially or unable to get loan approval. If you sell your current home before buying a new one, you may find yourself living in a hotel room for a while.
The sale of real estate has a lot of moving parts and pieces. It is unlikely that you will be able to coordinate the sale of your current home and the purchase of your new home down to the minute, but a good real estate agent knows how to navigate the process and will professionally negotiate both contracts to ensure the process runs as smoothly as possible.
How Many Homes Should I See Before Making an Offer?
This is entirely up to you. Some people find their home within hours, while others spend days, weeks, months or even years. These days the Internet gives you the opportunity to look at hundreds of homes before actually seeing them in person, allowing you to narrow down your choices in the comfort of your own home. According to the National Real Estate Association, most buyers see around 10 homes on average before putting in an offer.
The key to a successful purchase is to know in advance what you’re looking for.
How Do I Know if the Property is a Good Deal?
There is no way to know for sure whether or not you’re getting a bargain or if the home will appreciate. Looking at recently sold properties in the area and comparing them to the property you are looking to buy can accurately show current market trends. A real estate agent has access to all of this data and more and a good one will be able to provide you the information and guidance you’ll need to make an informed decision.
Is an Older Home as Good a Value as a New Home?
This is really just a matter of preference, but both newer and older homes offer distinct advantages, depending upon your unique taste and lifestyle.
Older homes can generally cost less than new homes, however, there are many cases where new homes can also cost less then older homes. Most new homes will not have any backyard landscaping and some don”t include any front landscaping either. With an older home, the landscaping is normally already completed and could have 10”s of thousands of dollars in landscaping done, which is included in the purchase price.
Taxes on some older homes may also be lower. Some people are charmed by the elegance of an older home but shy away because they”re concerned about potential maintenance costs. Consider a home warranty to get the peace of mind you deserve. A good Home Warranty plan protects you against unexpected repairs on many home systems and appliances for a full year or more after you move in.
In a new house, you can pick your own color schemes, flooring, kitchen cabinets, appliances, custom wiring for TV”s, electrical, computers, phones and speakers, etc., as well as have more upgrade options. Modern features like media rooms, extra-large closets and extra-large bathrooms and tubs are also more attainable in ground-up construction. In a used home, you rely largely on the previous resident”s tastes and technological whims, unless you plan to farm thousands into a remodeling and rewiring.
New-home designers can use new building materials such as glazed Energy Star windows, thicker insulation and other technology that will lower future energy costs for the owner. Most states now have minimum energy-efficiency requirements for new construction. Kitchens and laundry areas in new homes are designed to house more efficient energy-saving appliances. Older homes, unless they have undergone an energy retrofit, usually cost much more per square foot to air-condition and heat.
Builders have to follow very strict guidelines in new-homes and additions, especially in the West and Northwest, where earthquake safety standards must be observed. In general, new homes are usually more fire-safe and better accommodating of new security and garage-door systems.
Older homes can be better judged for their quality and timeless beauty. New homes that now possess a smooth veneer might reveal the use of substandard building materials or shoddy workmanship over time.
As you can see there are advantages and dis-advantages to each, but it really comes down to what fits you and what you are looking for in a home.
How Quickly Can I Close?
Again, like most things in real estate, it really depends. Typically it takes between 30 – 45 days to close. There are a lot of factors that go into determining how quickly you can close on a new home – your loan, the seller, inspections and repairs, etc. Ensuring you have enough time for due diligence and loan approval is key.
Should I Get a Home Inspection?
Yes! Yes! Yes! A home inspection is an inexpensive way to discover the current condition of the home you’re buying. Home inspections provide the opportunity to identify any major issues with a home prior to closing that may deter you from moving forward with the purchase.
A home inspection is performed during the due diligence period and the report, once completed, can be used in the negotiation of any repairs that you’d like the seller to complete prior to closing.