FAQs
Buyers
Questions you might have as a buyer
1 . What is a REALTOR®?
2. Can a home depreciate in value?
Generally, real property never depreciates in value, or more so, it is not very common for property to depreciate. This is why it’s a great investment. Make sure you carefully consider location and community when choosing a home, it can affect the home’s future value greatly.
If you are in a newly developed area, do some research on the construction of the surrounding areas being developed to determine if they may affect the value of your home.
3. What are closing costs?
4. What does FSBO mean?
5. What is a broker?
6. What is a contingency?
7. What is a debt-to-income ratio?
8 . What is the homeowners association (HOA)?
9. 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 an 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.
10. What’s the Difference between a “Listing Agent” and “Selling Agent”?
Listing Agents usually deal with sellers and are the ones who will list a property for sale on the Multiple Listing Service.
Selling Agents (also Buyers Agents) mostly deal with the homebuyers, usually only listing just a few homes for sale. They will sell the homes (which have been placed in the MLS) via the listing agents.
The majority of agents will focus on one or the other. Some agents will also divide their time between sellers and buyers and are usually regarded as the best ones since they are dealing with both sides of the coin.
If you phone an agent from a magazine or newspaper ad, you are usually contacting the listing agent. These agents will place ads to show the seller that they are making an effort to sell their home. Also, their advertising efforts can draw others who may decide to sell their homes.
11. Why should I use a real estate agent?
A real estate agent is more than just a salesperson. A real estate agent may act on your behalf, providing you with advice and guidance when buying or selling a home. Due to the constant changing of the market, the information available on listings is not always 100% accurate. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with a real estate agent.
If you are in the market to buy, it would be advisable to use a Buyer’s Agent. They can make recommendations on what terms and prices to offer as well as negotiating a deal with your best interest in mind.
Mortgage
Questions about mortgages you may have
1. Are lenders limited in the amount of escrow funds they can collect from borrowers?
The Real Estate Settlement Procedures Act (RESPA) sets standards for the calculation of the amount mortgage lenders require borrowers to deposit into the escrow account. RESPA limits the initial deposit into an escrow account to an amount equal to the sum sufficient to pay taxes, insurance premiums, and other charges on the mortgaged property for the first payment period, plus a cushion.
An escrow cushion is an amount of money held in the escrow account to prevent the account from being overdrawn when increases in disbursements occur.
On a monthly basis, mortgage lenders may not require borrowers to pay more than one-twelfth of the total amount of the estimated annual taxes, insurance premiums, and other charges, plus an amount necessary to maintain the allowable cushion.
2. Can I pay my own taxes and insurance?
3. How is interest calculated on a mortgage loan?
4. How long does the loan process take?
5. Is there a minimum credit score?
6. What are the benefits of doing a first and second lien combination?
7. What benefits do I receive from private mortgage insurance?
8. What does Prepaid Interest mean?
9. What is an escrow account?
10. What is my credit score and how is it calculated?
11. Why did my mortgage payment amount change?
12. Why does the title have to be cleared before I can get a mortgage?
13. Why is the Annual Percentage Rate (APR) on the Truth in Lending Disclosure higher than the rate shown on my note, which is the rate I thought I chose?
Sellers
Questions that you may have as a seller
1. Can I back out of my contract with one buyer and accept a new, higher offer from a second buyer?
2. Do I have to sell to the person with the highest offer?
No. If you prefer a lower-priced offer, perhaps with a better-qualified buyer and/or more attractive terms, you can accept that offer instead. Or you can give counteroffers to one or more of the buyers.
Beware, however, that if you turn down a full-priced offer, you may owe your agent a full commission even if you decide not to sell your home.
3. How should I price my home?
You must take into account the prevailing state of the real estate market and especially local market conditions. The real estate market continually changes, and market fluctuations affect property values. So it is critical to determine your listing price based on the most recent comparable sales in your neighborhood.
It would be a good idea to get a Home Value Request, or CMA, also known as Comparable Market Analysis.
4. What are comparables or comps?
5. What are the disadvantages of pricing my home on the high end?
Well, several factors may come into play:
- You might help sell similar homes that are priced lower.
- Your home may be on the market longer.
- You could lose market interest and qualified buyers.
- You might create a negative impression of the property.
- You could lose money as a result of making extra mortgage payments while incurring taxes, insurance and unplanned maintenance costs.
- You may have to accept less money.
A potential buyer may face appraisal and financing problems resulting from the inflated price.
It is not recommended to sell your home any higher than the appraised value unless demand is high in your area. Ask your real estate agent which price would be right for your home. Also, make sure you get a Home Value Request to assist in determining the best sales price for your home.
6. What does an appraisal mean?
A report made by a qualified person setting forth an opinion or estimate of value. The term also refers to the process by which this estimate is obtained.
In conventional mortgages and in the HUD-FHA Direct Endorsement Program, the lender receives a copy of the complete report, showing the basis for the appraiser’s estimate.
In VA cases and in HUD applications processed by HUD, the lender receives only a statement of the estimate of value, without any detailed supporting data.
7. What is a counteroffer?
8. What is an “Exclusive Right to Sell” listing?
9. What is an “Exclusive Agency Listing”?
10. Who is responsible for making repairs, if any, as a result of home inspection reports conducted for the buyer?
11. Why should I use a real estate agent?
A real estate agent is more than just a salesperson. A real estate agent may act on your behalf, providing you with advice and guidance when buying or selling a home. Due to the constant changing of the market, the information available on listings is not always 100% accurate. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with a real estate agent.
You don’t need to use a commissioned real estate agent to sell your home, but you may want to consider the benefits of having a real estate agent versus not using a real estate agent.
In addition, many people would rather use an Agent due to the complexities of modern Real Estate transactions since they usually incorporate legal and financial attributes, which takes them well beyond more simple transactions, such as the sale of an automobile.
There are several advantages when using a real estate agent to sell your home, such as – your listing will be added to the Multiple Listing Service (MLS) so that large numbers of buyers will have access to the seller’s property. In addition, your real estate agent absorbs all of the cost of advertising and marketing and the screening that will be done of potential buyers by Agents. The Agent will also handle the details of the negotiation.
Deciding whether to use an Agent or not depends on if you feel fully confident that you can handle all of the details, then you may well want to attempt selling your house on your own. If not, you most likely will want to use a real estate agent and leave the details to them.
Submit your review | |