Frequently Asked Questions
Some questions I’m asked about properties, getting started, and what’s expected.
What is the first thing I should do to prepare for buying a home?
A: Getting preapproved for a mortgage should be your first step to purchasing the home of your dreams. A pre-approval letter from your lender will get you moving in the right direction.
B: A pre-approval letter will let you know how much you can borrow, and helps in selecting which homes to consider
C: Getting a loan estimate upfront will let you know how much money you will need for the down payment and your closing costs. This will give you time to save up and make plans for these items.
D: Many real estate agents require a pre-approval before showing homes, especially in the upper-end of the market.
Should I sell my home first before buying a new home?
A: If you have equity in your home that you plan to use in the purchase of your new home, you will need to sell that home to access that equity and apply it to the new purchase.
B: If you won’t be needing that equity, you might consider renting your first home out and using it as an investment property.
Do I have to pay earnest money?
A: Earnest money is meant to declare your intention to purchase a home. It is usually between 1 and 2% of the purchase price of the home. It is a good faith payment to demonstrate that the buyer’s offer is genuine. It takes the property off the market, and holds it for you.
B: You will need to present this earnest money in the form of a check or cash. If the sale proceeds, the earnest money will be applied to your down payment and closing costs. If the deal falls through, the earnest money will be returned to the buyer.
C: In some instances, the term of the deal is agreed upon by both parties, buyer, and seller, but if the buyer backs out, the seller may be entitled to keep the earnest money.
A good real estate agent can protect you against this situation by stipulating certain conditions and contingencies.
Do I need to get a home inspection?
In short, YES! If you plan to finance your home with either an FHA or a VA loan, a home inspection is required. Even without FHA or VA financing, inspections are highly recommended.
A home inspection will reveal any defects in the home, things that you might overlook. These defects could end up being costly repairs, and will help you make a wise financial decision.
What is a final walk-through, and should I do one?
A final walk-through is exactly what it sounds like. One last walk through the property before everything is said and done. It isn’t required, but it’s very wise.
This gives you, the buyer, the opportunity to confirm nothing has changed since you first saw the home. You can also confirm that any requested repairs were completed, as per the terms of the contract.