HOME BUYING PROCESS
What is a buyer’s representative?
Defined most simply, a buyer’s representative (also buyer’s rep, or buyer’s agent) is an advocate for the buyer—not the seller—in a real estate transaction. Real estate laws and regulations vary from state to state, but buyer’s representatives usually owe full fiduciary (legal) duties, including loyalty and confidentiality, to their buyer-clients and work in their clients’ best interests throughout the entire transaction.
What services are provided by our buyer’s representative?
If you’ve established an agency relationship with a buyer’s representative, common services include:
Helping you clarify your priorities.
Suggesting sources of financing and other service professionals, such as inspectors and exterminators.
Providing sources of accurate and lawful information on neighborhoods, schools, and communities.
Selecting and arranging property showings.
Evaluating particular properties.
Explaining forms and agreements.
Suggesting contract contingencies to protect you, rather than the seller.
Assisting in the negotiations for a favorable price and terms.
Keeping all information confidential that could weaken your bargaining position.
Monitoring the entire purchase process, assisting with issues that arise through closing.
What services can I expect to receive?
This depends on what level of service you have established as a home buyer. If you have not formed an agency relationship, you are probably considered a customer, rather than a client, and you will likely receive a lower level of service. The terms vary from state to state, and each buyer’s representative can set their own guidelines within their state parameters and their brokerage practices. So you should clarify, preferably in writing, the services you are entitled to receive before you start viewing properties.
It’s also important to understand that if you do buy a home, your buyer’s rep will probably receive compensation (through the listing broker), regardless of whether you are a customer or a client. So more times than not, it’s in your best interest to formalize an agency/representation relationship, so you’ll receive the highest level of service possible.
What is the best way to search for homes online?
Email us at and we will send you an updated list of homes for sale daily .
How much house can I afford?
When evaluating how much you can afford for your home and mortgage, lenders usually use two rules of thumb:
1. Your maximum monthly mortgage payment should not exceed 28 percent of your gross (pre-tax) income.
2. Your maximum debt load, including your mortgage payment, should not exceed 30 percent of your gross income.
These ratios are typical of those required to secure a conventional mortgage. Lenders will be able to supply details about other types of mortgages, such as FHA or VA loans, which offer more flexible qualification standards. There are many types of mortgages and financial tools available that provide flexibility in interest rates, terms, and down payment requirements.
What’s the difference between being pre-qualified and pre-approved for a mortgage?
Typically you will first pre-qualify for a mortgage, then get pre-approved before you have found the specific home you wish to purchase. What is the difference?
Pre-qualification: An informal determination by a lender or mortgage broker stating how much mortgage you can afford.
Pre-approval: A guarantee in writing by a lender to grant you a loan up to a specified amount.
What are the advantages of being pre-approved?
There are two advantages of being pre-approved for a loan as early as possible in your home buying process:
1. Sellers will find any offer you make more attractive if you are pre-approved for a mortgage.
2. The length of time before closing can be shorter if you’ve completed the steps to securing mortgage approval prior to signing a contract on a property.
Closing costs are simply the fees associated with 1) purchasing a home, 2) borrowing money, and 3) preparing paperwork to finalize the sale. Your total closing costs will vary depending on where your new home is located, what type of property you are buying, the price of your home, and the complexity of the transaction.
It is extremely important that you work closely with your buyer’s representative in the early stages of your home search to estimate what these costs could be, since closing costs can easily represent thousands of dollars.
The main categories are:
DISCOUNT POINTS TO BUY DOWN THE MORTGAGE
If you want to reduce the ongoing cost of your mortgage over the life of the loan, you’ll want to consider this optional fee. Amounts can vary significantly, from 0.5 to 3 points on the total mortgage amount. This is a one-time charge that is fully deductible as mortgage interest.
COSTS FOR ORIGINATING THE MORTGAGE
This generally includes a variety of fees such as the loan origination fee, the appraisal fee, and the cost of credit reports. Other related closing fees may include hazard and mortgage insurance, and interest accrued on the mortgage between closing date and the end of the month.
TAXES AND OTHER LOCAL FEES
Charges will vary according to local government requirements. Some may demand that property taxes be prorated according to when you officially own your home. You may also be required to pay personal property taxes, homeowner’s association dues, and other assessments that are specific to the area that you are moving into.
You will have to pay for any research involving public records and title history for your new property. This insures that the title is unencumbered by other ownership claims or liens and can be delivered to you at closing. Other costs include recording and transfer fees, which cover legally recording the deed to your name.