Top Frequently Asked Questions From Home Buyers

Whether a buyer is purchasing their first home or their fifth home, the home buying process can create many emotions and feelings.  One of the best ways to ensure the process is not overwhelming for a buyer is to be well educated and properly prepared for the process.

There are normally many questions that home buyers will have throughout the process.  Even an experienced home buyer can forget exactly how the process works and what the proper steps are to ensure the process is relatively smooth.

When buying a home, one of the most important things to understand is that “no question is a dumb question.”  If you’re unsure of something when buying a home, ask!

There are many questions that home buyers seem to ask quite often.  Some questions are before starting the home buying process, during a house hunt, while writing a contract, or after an offer is accepted.  Here are the top frequently asked questions from home buyers.

Questions Asked While “House Hunting”

  • What is a short sale?

Short-sale are tricky and harder to work with, it is important to have a Realtor that understands and has experience in Short-sales. Short-sale can take up to 6 months or more. Remember that even if you enter into a short-sale the months are passing by and it is possible that it could go into foreclosure at the same time.

Before getting involved with a short-sale, it’s VERY important you understand exactly what a short-sale is and what to expect from a short sale.  The easiest way to understand a short sale is the sale of a home in which the proceeds from the sale are less than the balance of debts secured by liens against the property and the home owner cannot afford to pay the liens in full.

Before purchasing a short sale, you should consider things such as the time it can take for a short sale response, the fact that a foreclosure is still possible, and that many short sale properties are in disarray.  Short sales are not impossible to buy but you must be patient and be in no immediate rush.

  • What is a foreclosure?

Foreclosures can actually be a smoother transaction than a short- sale.  A foreclosure, sometimes referred to as a REO, is a property that is owned by a lender.  If you’re considering the purchase of a foreclosure, it’s important to understand that most are sold “as-is.”  Foreclosures, if not purchased by an owner occupant, are often purchased to be fixed up, “flipped,” or investors and sold to a owner occupant.

  • How is the neighborhood/area?

When buying a home, a common question home buyers have is regarding the neighborhood, schools, closest shopping centers, or public transportation.  As a real estate professional, there are rules against steering and providing personal insight into specific areas and neighborhoods.  This doesn’t mean that your Realtor cannot provide you with tips to help you choose the right neighborhood when buying a home.  Many buyers wonder about the growth of the local economy, crime statistics, taxes, and local amenities.  If you have a top Realtor when buying a home, you should be able to receive all of the pertinent information to allow you to make an educated decision.

  • How are the schools?

There is no doubt that school’s impact property values.  Realtors have to tread very lightly on answering this question.  Just like tips for selecting a neighborhood, a top Realtor should be able to provide you with information on how to get names or websites on the local schools so that you can determine whether or not the schools are acceptable or not.

  • What are the average utility bills?

When buying a home, it’s important to ask what additional costs will be in addition to the monthly mortgage payment.  Utility bills are just one to consider what additional costs would be when buying a home.  Utility bills can be obtained from the home owner and in some cases, from the local utility company, who can provide averages over the past 12 months.  Just remember, everyone prefers to have their home temperature different, so the average bill could be different if you were to purchase the home.

Questions Asked While Placing A Purchase Offer

  • How much should I offer the sellers?

When buying a home,  know what you have in mind to determine how much you should offer the seller.  Certainly you could ask for a suggestion from your Realtors for advice and thoughts, but ultimately you are the only person who can determine how much you should offer.

  • What is an earnest money deposit?

Earnest money deposit is also frequently referred to as a good faith deposit.  When a buyer purchases a home, they provide the seller’s real estate company a deposit to hold in their escrow account.  The primary purpose of this deposit is to show a seller you are serious about purchasing their home.  The amount that is deposited is subtracted from the final figure that a buyer pays at the closing table.  In most cases, the larger the deposit, the stronger a purchase offer looks to a seller.

  • How long does the seller have to respond to my offer?

There is not a standard answer to this question but look at is as a “life”.  A purchase offer will have a “life.”  The “life of the offer” can vary from 12 hours to 3 or 4 days.  There are many circumstances that can effect the length of the “life of the offer.”  Your Realtor should know how long of a “life” to give to your offer.  If you’re looking to purchase a home that is newly listed and the possibility of multiple offers exists, a shorter life is recommended.  If the home you’re looking to purchase has been on the market for 3 months and the seller is located out of town, a 2 day “life” maybe necessary and/or recommended.

  • What if my offer is rejected?

When a purchase offer is submitted to the seller there are generally four possible responses.  The first is an accepted offer, the second is a counter offer, the third is a rejected offer, and the final is an offer that is not responded to.  If your offer is rejected, meaning the seller says no and doesn’t counter, you have the right to place another offer.  It’s not very common an offer is rejected or not responded to, unless a seller is offended by the offer or “low-ball” offer.

  • Do I have the option to have any inspections?

When buying a home, Most real estate transactions are contingent upon a home inspection (acceptable)  you have the option to perform several types of inspections.  The purchase offer you write can be contingent upon a satisfactory home inspection, pest inspection, chimney inspection, radon test, and many other inspections.  In most cases, it’s recommended that when buying a home, you at least get a home inspection.  There are home inspection findings that are more common than others, however, no two homes are the same so it’s a great idea to get the home inspected.

Questions Asked After A Purchase Offer Is Accepted

  • What’s the next step?

Congratulations!  Your offer was accepted, now what?  Between contract acceptance and the closing date, there are many things that need to be completed.  In a nutshell, after an offer is accepted, Your inspection will need to get completed. Deadlines need to be met on your inspections according to your contract.   After the inspections, you complete a formal mortgage application, generally the bank will order an appraisal and that deadline needs to be met. the title, abstract, survey, and any miscellaneous paperwork is completed.  When buying a home, finding the perfect home is only one part of actually becoming a homeowner.  Throughout the mortgage process, you should expect the bank to require documentation, letters, and other items from you to satisfy the bank conditions, so don’t be upset or surprised when this happens.

  • Do I need to do a final walk-through?

As a buyer, you have the option to perform a final walk-through.  Is a final walk through a requirement?   NO.  Is a final walk through necessary?  YES! Generally when buying a home several weeks go by between when you last walked through your home.  Lots of things can change during that time.  When doing a final walk through a few things you should check is that furnace is working, the toilets are flushing properly, and there is hot water, are there any new holes in the wall.

  • When is the closing date?

When buying a home, the excitement level is extremely high.  It’s important to understand that the closing date in the purchase offer is a target and not a guarantee. Many variables can change the closing date.  Before you hire the movers and take time off from work, know that the closing date in the contract isn’t necessarily the date you will own your new home.  Many buyers will ask their Realtor this question, however, it isn’t up to the Realtors when a closing will be.

 Final Thoughts 

When buying a home, being prepared and well educated can really make a huge difference.  Again, “no question is a dumb question” and if you are unsure of something, ask!  The home buying process begins before you ever look at one home and the process continues all the way up to the final walk-through.  When buying a home, it’s critical you stay focused and organized throughout the entire process.   After reading these frequently asked questions, you should now have a stronger understanding of what to expect throughout the process.