Real Estate FAQ
How do you determine the listing price of a home?
Determining the right listing price involves a detailed market analysis, which includes reviewing comparable home sales in your area, understanding current market trends, assessing the unique features and condition of your property, and adjusting for factors like location and local demand. Our goal is to set a price that attracts potential buyers while ensuring you receive fair market value for your home.
What is the best time to buy/sell a home?
While the best time to buy or sell a home often depends on personal circumstances and local market conditions, generally, the spring and summer months see a higher volume of transactions due to favorable weather and the desire of many families to move during the school vacation period. However, buying during off-peak seasons like fall and winter might mean less competition and potentially better deals. Ultimately – It really depends on your specific area and your specific goals.
What should I prepare for an open house?
To prepare for an open house, start by deep cleaning your home and addressing any maintenance issues. Declutter each room to showcase ample space and consider staging your home to highlight its potential. Ensure good lighting, pleasant aromas, and a welcoming atmosphere. Additionally, prepare a property fact sheet that includes details about the home’s age, improvements, taxes, and any notable features to help inform potential buyers.
How long does it typically take to buy or sell a home?
The short answer: Every home is different! The timeline for buying or selling a home varies based on several factors, including the state of the market, the unique aspects of the home, and the readiness of the parties involved. Selling a home can take anywhere from a few days to several months, while buying a home usually involves several weeks from the initial offer to closing, depending on loan approval, inspections, and other contingencies.
What are closing costs and who pays for them?
Closing costs are the various fees and expenses associated with completing a real estate transaction. These can include loan origination fees, title searches, title insurance, taxes, lender fees, and escrow payments. Typically, buyers and sellers both have specific costs they are responsible for, which can sometimes be negotiated during the sale agreement. A clear understanding of these costs upfront can prevent surprises at closing.
How can I make my home more appealing to buyers?
Making your home appealing involves several strategic steps: enhance curb appeal by maintaining the landscaping and exterior; declutter and depersonalize the interior to help buyers envision themselves in the space; consider minor renovations or updates, especially in high-impact areas like kitchens and bathrooms; and ensure your home is well-lit and inviting during viewings.
What should I look for in a purchase agreement?
A purchase agreement should clearly outline all critical elements of the sale, including the agreed-upon sale price, deposit required, closing date, and any contingencies such as financing or inspections. Make sure to review terms related to who bears the cost of any necessary repairs identified during inspections and any penalties for either party backing out of the deal under certain conditions.
How do you handle negotiations?
Our negotiation strategy focuses on achieving the best possible outcome while maintaining a fair and professional approach. We gather extensive data on market trends and comparable sales to support our position, engage openly with all parties involved, and strive to find win-win solutions that respect the interests of both buyers and sellers.
Can you explain the home inspection process?
The home inspection is a critical step in the buying process where a professional inspector assesses the property for structural, mechanical, and safety issues. They will examine the roof, foundation, HVAC systems, plumbing, and electrical systems, among other components. The findings can affect negotiations, as they provide a basis for requesting repairs or adjusting the offer based on the condition of the home.
What are the common pitfalls in buying/selling a home?
Common pitfalls include failing to secure financing before making an offer, underestimating the importance of a thorough home inspection, overlooking the total costs involved in buying or selling, and not understanding the legal and contractual obligations.
We’re here for you and can help you navigate these challenges effectively!
Mortgage FAQ
What is an APR?
The Annual Percentage Rate (APR) is an interest rate that reflects the total cost of a mortgage over a year. This rate is usually higher than the advertised mortgage rate because it includes points and other credit costs. The APR helps homebuyers compare different mortgages based on their annual cost. It aims to measure the “true cost of a loan” and create a level playing field for lenders. By doing so, it prevents lenders from advertising a low rate and hiding fees.
It’s important to note that the APR does not affect your monthly payments. Your monthly payments depend solely on the interest rate and the loan term.
However, since the APR calculation is influenced by various lender fees, a lower APR does not always indicate a better rate. To accurately compare loans, you should ask lenders to provide you with a Loan Estimate (LE) of the costs for the same type of program and interest rate. You can then exclude fees such as homeowners insurance, title fees, and attorney fees, among others, and add up all the loan fees. By doing this, you can determine which lender has the lower loan fees, and hence, a more affordable loan.
What documents do I need to prepare for my loan application?
Every scenario is unique, but the documents we’ll likely need to review include:
Income / Assets:
- W2’s – from the last two years
- 1040 federal tax returns – from the last two years
- Two recent pay stubs
- Two recent bank statements – all pages
- Self-Employed: K1 / 1099 / Profit and Loss YTD
Housing:
- Current and previous addresses for the previous 2 years
- Leasing: name and phone number of landlord(s)
- Investor: copy of lease agreements on rental properties
Other:
- Copy of your driver’s license or state-issued ID for all borrowers
There may also be required documents we may need to review depending on your specific scenario.
What does it mean to lock the interest rate?
Mortgage rates are subject to change and can fluctuate between the time of loan application and the closing of the transaction. This can result in unexpected increases in monthly mortgage payments if interest rates rise significantly during the application process. To prevent this from happening, lenders offer borrowers the option to “lock-in” the loan’s interest rate for a specified period, usually ranging from 30 to 60 days. This lock-in period ensures that the borrower will receive the same interest rate that was agreed upon at the time of the lock-in, regardless of any subsequent rate changes.
What are points?
Points are expenses that must be paid to a lender to obtain mortgage financing according to specific terms. One point is equivalent to 1% of the loan amount. That means for a $100,000 loan; one point would cost $1,000.
Should I pay points to lower my interest rate?
If you intend to remain in the property for a few years, paying discount points to lower the interest rate on your loan is typically a wise decision. Doing so can lower your monthly mortgage payment and potentially increase the amount of money you can borrow. Nevertheless, if you plan on living in the property for only a year, the monthly savings may not be sufficient to recover the upfront cost of the discount points you paid. Therefore, it’s important to consider your long-term goals before deciding to pay discount points to reduce your loan’s interest rate.
Reach out and we can review your specific scenario to see if paying points to lower your interest rate makes sense.
What is an appraisal?
A critical component of buying a home is the appraisal. An appraisal is a third-party professional evaluation of the value of a property that is used to help determine the amount of a loan.
In compliance with government regulation, appraisers hired for a mortgage transaction on a conforming loan are chosen from a pool of qualified appraisers at random. Neither the borrower nor the lender has the flexibility of deciding which appraiser will inspect your home.
A few key components of an appraisal:
- The Site: Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features…
- Design: Quality of construction, finish work, fixed appliances, and any defining features…
- Condition: Age, deterioration, renovations, upgrades, added features…
- Health and Safety: Structural integrity, code compliance…
- Size: Above grade and below grade improvements…
- Neighborhood: Is the property comparable to others in the neighborhood?
- Functional Utility: Is the property functional as built – style and use?
- Parking: Garages, carports, shops, etc…
Other factors in determining value could be the home’s curb appeal, lot size, and conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood and pull up in front of your home.
What happens during underwriting?
During the underwriting stage of the mortgage process, the underwriters will evaluate the property, title, and the information and documents you provided once your final loan package has been submitted. This can take anywhere from a few days to several weeks to determine final approval and a conditions list, which could include a final letter of explanation for findings on a credit report, official verification of employment, and an updated hazard insurance policy provided by your home insurance agent.
Items typically obtained during the underwriting stage:
- Appraisal
- Updated Title
- Escrow Amounts
- Loan Payoffs
- Additional Property Liens
- Taxes
- HOA Paperwork
- Additional Loan Paperwork
What is a conditional approval?
The “Conditional Approval” milestone is an important step in the purchase loan process because it means that an underwriter has reviewed your complete file and is giving a list of final documentation to submit prior to closing.
What does "clear to close" mean?
“Clear to close” is the final step in funding your loan or “closing” on your purchase is where all final documents are signed, last-minute underwriting conditions are met, and money is exchanged.
At this point in the mortgage process, all inspections and appraisals have been completed, initial contracts and documents have been reviewed through underwriting, and it is time to sign your final documents.
What happens at closing?
Closing (also known as funding) is the official transfer of property ownership from the seller to the buyer. The process involves several parties, typically including the seller, buyer, real estate agents, attorneys, title or escrow firm representatives, clerks, secretaries, and other staff. The duration of the closing process varies from about one hour to several, depending on the purchase offer’s contingency clauses and the need to set up escrow accounts.
The closing paperwork is primarily handled by attorneys and real estate professionals. It is recommended that you conduct a final inspection or walk-through before closing to ensure that the agreed-upon repairs have been completed and that items such as drapes and lighting fixtures that were supposed to remain with the house are still there.
Once everything is finalized, the check (or wire transfer) will be given to the seller, and the buyer will be given the keys to the property.