1) What can I afford?
The first step in the real estate transaction is for buyers to meet with a mortgage lender. The lender will go over tax returns, income, assets, credit scores and determine the buyer’s debt to income ratio. Based on the lender’s findings they will pre-qualify the buyer for a home in the price point appropriate for them. Your real estate agent can provide a list of recommended lenders if requested.
2) What are the real estate agents fees?
The seller pays the buyer’s agent’s real estate fee so there is no cost to the buyer to be represented by a buyer’s agent. That being said, the buyer’s agent works for you and is providing you with knowledge and representation throughout the transaction and has your best interest in mind.
3) How much money do we have to put down?
There are several types of loans products for buyer’s to go over with their lender however, buyer’s are typically required to contribute a minimum of 3.5% of the purchase price for their down payment.
4) What other costs will there be to close the transaction?
Once a home has been identified and an offer is accepted, the lender will provide a good faith estimate which will outline the buyer’s costs which will include closing costs and fees. In certain loan products buyer’s can ask the seller to pay up to 6% of their closing costs
5) What are the important dates in the transactional timeline?
Within three days of an accepted offer escrow will open. A one to three percent (of the purchase price) deposit is required to open escrow. This is known as the buyer’s earnest money deposit and will be applied to the buyer’s overall down payment at closing. From the date of acceptance the buyer has 17 days to conduct a physical inspection, negotiate repairs, review HOA documents, order an appraisal and finalize their loan. Timelines are critical and your real estate agent will keep everything on track, help you negotiate contractual items and be your advocate throughout the transaction for a successful closing and homeownership!