Frequently Asked Questions About Home Buying
Buying a home is an exciting journey, whether it's your first or you're a seasoned investor. But before you dive into the search for your perfect property, it's essential to pause and reflect. Here are four important questions to ask yourself before making any decisions:
What do I want in a home?
Take time to think about what’s most important to you in a home. Whether it’s a large backyard, proximity to schools, or walkability, knowing what you want will help narrow down your options. There are many types of properties, from single-family homes to condos, and choosing the one that fits your needs and lifestyle is key. Start by focusing on your ideal neighborhoods.
What can I afford?
A good rule of thumb is not to spend more than 30% of your monthly income on a mortgage. For a more accurate picture, speaking with a lender or mortgage broker is essential. I can recommend some excellent professionals to help guide you through the process and determine what fits your budget.
Am I financially prepared?
Before you start home shopping, it's important to check your credit. Take a few months to review your credit history, ensure everything is accurate, and fix any issues. Getting pre-approved for a home loan will also give you a clear picture of what you can afford, and help you make serious offers when the time comes. Pre-approval is based on your financials, including income, debt, and credit history.
How can I make the best offer possible?
When making an offer, we’ll take a close look at similar homes in the area to ensure you’re offering a fair price. We’ll research both the active listings and recently sold homes to develop a strategy that puts you in the best position to secure your dream home.
Escrow Period
also known as the escrow timeline, is a specific timeframe during a real estate transaction when certain tasks, conditions, and obligations are fulfilled before the property sale is finalized. It is a critical phase in the buying and selling process where funds, documents, and other pertinent items are held in escrow until all requirements are met. Here are the key aspects and activities typically associated with the escrow period:
Earnest Money Deposit
Upon opening escrow, the buyer typically provides an earnest money deposit to demonstrate their serious intent to purchase the property. The funds are held in escrow and will be applied toward the purchase price at closing.​
Common Contingencies That Buyers Use
During the escrow period, the buyer may have specific contingencies to address, such as financing, home inspection, appraisal, or review of homeowners association documents. These contingencies allow the buyer to investigate the property and ensure it meets their expectations and requirements. If any contingencies cannot be satisfied, the buyer may have the option to cancel the contract and have their earnest money deposit returned.
Inspection Contingency: Allows the buyer to have the property inspected by a professional home inspector. If significant issues or defects are discovered during the inspection, the buyer may have the option to renegotiate the terms of the agreement, request repairs, or cancel the contract.
Financing Contingency: Allows the buyer to back out of the purchase agreement if they are unable to secure financing within a specified timeframe. It typically includes provisions for the loan amount, interest rate, and any other terms of the mortgage.
Appraisal Contingency: States that the property must appraise for at least the agreed-upon purchase price. If the appraisal comes in lower than the agreed price, the buyer may have the right to negotiate a lower price, request additional funds from the seller, or terminate the contract.
Strategies to make a strong offer
Highest Price
If you can afford it, this usually wins the deal.
Faster or Flexible Closing Date
If you can, promise to close more quickly or offer flexibility with the closing date.
Waiving Contingencies
Waiving contingencies can reduce the seller’s risk, but increase yours.
When making an offer, we’ll take a close look at similar homes in the area to ensure you’re offering a fair price. We’ll research both the active listings and recently sold homes to develop a strategy that puts you in the best position to secure your dream home.
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Patrick Gonzales
Kim Pausanos