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Should I Talk With A Bank Before Looking At Homes?

The answer to the question is yes and YES!  There are tons of reasons why you should talk with a bank, or mortgage lender, and get pre-approved before looking at homes.  First off, talking with a bank before looking at homes can help you understand exactly how much you can afford.  Don’t look at homes for $250,000 if you can only afford up to $200,000.

If you’re a first-time home buyer, talking with a bank before looking at homes is something we can all agree on. You DON’T want to miss your chance on a first-time buyers program.  These programs can vary from state to state and county to county, so knowing exactly what’s available to you, is critical.

Another important reason to talk with a bank before looking at homes is so you understand exactly what costs are associated with buying a home.  The number of home buyers who don’t understand the difference between a down payment, pre-paid items, and escrows is a large amount, which is okay. These things can be thoroughly explained by a mortgage professional.  A mortgage professional can give you advice on the type of financing you should be looking to obtain and also whether or not you should request the seller to contribute towards your closing costs, also known as a seller’s concession.

Should I Buy Or Continue To Rent?

Buying a home can be a great investment.  That being said, renting can also be something you should keep doing depending on your situation. The current interest rates are incredible.  A 30-year FHA mortgage can be locked in at a rate of around 3.5%.  With those rates, it actually can be cheaper to pay a mortgage right now than paying rent.

Ask yourself these things before making the final leap of becoming a home buyer.  One of the most important things to consider is the length you plan on staying in a home, if you were to purchase.  If you are not looking to stay in your fresh new home for more than a couple years, maybe don’t get that invested and stay renting. Another question to ask yourself is whether you are ready to take on the additional “responsibilities” of owning a home.  When owning a home, there will be general home maintenance that should be done that suddenly you are in charge of. Are you ready for that? Buying a home is a fantastic option for many people, but it doesn’t mean you need to do it NOW. 

Do I Really Want To Hire A Realtor?

Whoa! You don’t want to have some backup? No worries, but in all honesty, most would recommend you do hire a Realtor to have at your side.  There are many reasons why you should have a Realtor represent your best interests when buying a home.  Keep in mind, all Realtors are not the same! If you aren’t sure about one Realtor, it doesn’t mean there isn’t a good one to fit YOUR needs. When choosing a buyer’s agent, make sure you know how to properly interview prospective Realtors when buying a home.
Attempting to buy a home without a Realtor can really make the home-buying process more difficult.  Having a Realtor is always recommended when buying a home.  One thing not to do when buying a home is calling the listing agent because you don’t want to “bother” your Realtor.  This is one thing that real estate agents hate.

Who Pays The Realtor Fees When Buying A Home?

This is the exact reason people ask WHY they should even hire a Realtor. The average buyer does not know who pays the Realtor and for first-time buyers, that is a-okay! In truth,  there are no guarantees; however in most cases the seller pays the Realtor fees.

How Are The Schools?

This is another question that Realtors should tread very lightly with.  There is no doubt that schools impact property values.  Just like tips for selecting a neighborhood, a top Realtor should be able to provide you with names or websites where you can find information on the local schools so that you can determine whether or not the schools are acceptable to you.

How Is The Neighborhood/Area?

When buying a home, a common question home buyers have is regarding the neighborhood/area.  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 on areas and neighborhoods.

More Common Questions

I Own A Home. Should I Buy Another Before Selling My Current Home?

Is there a right answer to this question? No, not really. There are pro’s and con’s to buying a home before selling your current home, and the same can be said about selling your current home before buying another.

Buying a home before selling your current home

The biggest benefit to buying a home before selling your current home is the fact that you have a suitable property lined up. Some might say, “Hey, YES! No stress, we are cruising”. Having the home already means you’re not rushing to find the right home. This however also can create disappointment and heartbreak.  If you are unable to purchase a new home without having to sell your current home, your purchase offer is going to be contingent upon sale and transfer of title of your current home.  If your current home does not sell in a timely manner, this can lead to you getting “bumped” by a non-contingent buyer and you losing out on the home you’re looking to purchase, which can be devastating.

Selling your current home before buying a new home

I’ll be honest, each home sells at its own pace and I wish I had a magic wand for you all.  There is no crystal ball that exists that can tell you exactly how long though.  The plus side to selling your current home before buying a new home will put you in an ideal position to negotiate on the new home you’re purchasing due to the fact you are purchasing without the sale contingency of your current home.

One risk of selling your current home without buying a new home first is the chance of not being able to have a place to live. YIKES. There are options if your current home sells before buying another though.  A “rent-back” can sometimes be negotiated with the buyer of your current home.  A “rent-back” would allow you to retain possession of your current home for a certain number of days after closing, at the expense of paying the buyer’s mortgage.  A “rent-back” allows for additional time to find a new home.

Can I Find A Rent-To-Own Property?

Can you find a needle in a haystack? Sure, especially if you’re familiar with haystacks!  Sadly, the probability isn’t very high for the majority of us. The same can be said about a rent-to-own property.  A common question from home buyers is if rent-to-owns exist or whether an owner would consider that option.  These magical properties are out there, but there are some things that you need to know before agreeing to a rent-to-own.

When an owner is offering “rent-to-own” as a possible financing option, they are taking on a high risk since in most cases, a rent-to-own buyer has a credit score that is not impeccable.  Since a seller is taking a higher risk the terms for a rent-to-own must be considerably favorable for the owner.  This often leads to less than favorable terms for a buyer.  To break it down, it could mean a higher interest rate and more money down than if you were to just buy a home. Don’t be afraid to check out the option, but keep your eyes peeled to the alternatives. 

What Are The Average Utility Bills?

When buying a home, it’s important to know what additional costs will be in addition to the monthly mortgage payment.  Utility bills are just one of the additional costs to consider 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.  Keep in mind, everyone prefers to have their home temperature different, so the average bill could be different if you were to purchase the home.

What Is A Foreclosure?

Believe it or not, 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 by investors, fixed up, “flipped,” and sold to a owner occupant.

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