Home Buying Process | 2017 [Frequently Asked Questions]


Common Questions about the Home Buying Process


Purchasing a new home is one of the largest purchases a person will make in their lives. It can be exciting and terrifying, all at the same time. There are many steps to the home buying process and each step creates a new set of questions. Having answers to the most common home buying questions can alleviate some of the stress that comes with purchasing a new home. Buying a home may seem intimidating, but a good REALTOR® will make it much easier. We will take care of you through each step of the process, and make your experience as smooth as possible.

If you have questions that you do not see addressed below, please contact us and we would be happy to answer them for you!

How will you tell me about the newest homes available?
The Multiple List Service Website (MLS) provides up-to-date information for every home on the market. We constantly check the New to Market list so that we can be on the lookout for our clients. We will get you this information right away, the way that is most convenient for you; by phone and / or email.
Will you inform me of homes from all real estate companies or only Keller Williams Realty?
We will keep you informed on ALL homes. We want to help you find your dream home, which means we need to stay on top of every home that’s available on the market.
Can you help me find new construction homes?
Yes, we can work with most builders and get you the information you need to make the best decision for you and your family. On your first visit with the builder, we will accompany you. By using our services with a new construction home purchase, you will receive the services we offer, as well as those provided by the builder, at no additional cost.
How does a for sale by owner (FSBO) work?
Homeowners trying to sell their home without agent representation are usually doing so in hopes of saving the commission. If you a see a FSBO and want the advantages of our services, let us contact the owner for you and make an appointment. Most times the homeowner will work with an agent, even though their home is not listed, since the agent is introducing a potential buyer to their property.
Can we go back through our property again once an offer is made, but before settlement?
Usually, we can notify the seller and schedule a convenient time to visit the property again. Immediately before the closing, we will schedule a final walk-through and inspection of your new home.
Once my offer is accepted, what should I do?
Celebrate and focus on moving into your new home! You will want to schedule your move, pack items and notify businesses of your address change. We will provide you with a moving checklist to help you remember all of the details. Our business partners will also give you a good faith estimate and HUD statement, which will indicate the amount you will need to bring to closing
What is a HUD-1 Settlement Statement?
This is a summary of the financial portion of the real estate transaction. The title company or closing agent is required by the Department of Housing & Urban Development to use the HUD-1 on virtually all residential real estate transactions involving a lender. The statement will list the purchase price, loan amount, closing costs for the buyer and seller, and will show all sums being charged and disbursed to the parties involved. It also clearly summarizes the total amount due from the purchaser.
What does a title company do?
Think of a title company as the final stop on the road to a real estate or refinancing settlement. They oversee the interests of all parties (buyers, sellers, lenders, real estate agents) and coordinate the transfer of money and property at the time of closing. Prior to settlement, the title company will research the ownership history of the people (title examination) to determine that the title is free of any liens or claims. At the settlement table, the title company collects and distributes funds from the transaction, transfers ownership of the property and issues title insurance.
Do title companies charge different rates for title insurance?
Title insurance rates are set by State Insurance Commissions and are based on the purchase price of your property (owner’s policy) and the loan amount (lenders policy).
Am I required to buy title insurance?
Most lenders will require that you purchase a lender’s title insurance policy. This protects their investment in your property. You are not required to purchase an owner’s policy; however, your one time payment will protect your property for as long as you own it.
When I start visiting homes, what should I be looking for the first time through?
The home you ultimately choose to call home will play a major role in your family’s life. A home can be an excellent investment, of course; but more importantly, it should fit the way you really live with spaces and features that appeal to everyone in the family.
At each home, consider these important factors:
  • Is there enough room for you now and in the near future
  • Is the home’s floor plan right for your family?
  • Is there enough storage space?
  • Will you have to replace the appliances?
  • Is the yard the size you want?
  • Are there enough bathrooms?
Is an older home as good a value as a new home?
It’s a matter of personal preference. Both new and older homes offer distinct advantages, depending upon your unique taste and lifestyle. New homes generally have more space in the rooms where today’s families do their living, like a family room or activity area. They’re usually easier to maintain, too. However, many homes built years ago offer more total space for the money, as well as larger yards. Taxes on some older homes may also be lower. Some people are charmed by the elegance of an older home but shy away because they’re concerned about potential maintenance costs.
Do I need to bring anything along when I’m looking at homes?
Be sure to bring a pen for note-taking and a flashlight for seeing enclosed areas, however a cell phone light can serve this purpose. We will provide you with MLS details on each property that we view. Be prepared to “snoop around” a little. After all, you want to know as much as possible about the home you buy. Sellers understand that because their home is on the market, it will be looked at pretty thoroughly. This Homebuyer’s Book can be a reference guide when you are looking at homes. If you need to go back to a home for another look, we are happy to schedule an appointment. Be sure to ask any questions that you have about the home, even if you feel you’re being nosy. You have the right to know. It’s important to know that the seller will supply the buyer with a Residential Property Disclosure statement prior to writing a contract.
What should I ask my agent about each home that I look at?
As a rule of thumb, ask any questions you have about specific rooms, features or functions. Pay particular attention to areas that you feel could become “problem” areas (additions, defects, areas that have been repaired, etc.). And above all, if you don’t feel your questions have been answered, ask until you do understand and are satisfied. In most cases, we will be able to provide you with as much detailed information as you need!
How many homes should I look at before I buy?
There is no set number of homes you should look at before you decide to make an offer on one. That’s why providing us with as many details as possible up front is so helpful. The perfect home may be waiting for you on your first visit. Even if it isn’t, the house-hunting process will help you get a feeling for the homes in the community and narrow your choices to a view homes that are worth a second look. Average buyers are looking at 8-10 homes in today’s market, while only scheduling 4-6 in one day.
What should I think about when I’m deciding which community I want to live in?
There are obviously many factors to consider when you choose a community. A few things to look for include good city services, nice parks with playground facilities, convenient shopping and transportation, track record of sound development and good planning.
Where can I get information about local schools?
We can be a great resource for providing some information, while there are plenty of online resources that can provide the specific details and ratings you are looking for.
How can I find out what homes are selling for in a given neighborhood?
Home sales are a matter of public record. The County Appraiser’s Office, a local residential appraiser, or the planning department for the locality, are all resources you can call. All of the information you are looking for can also be found through online resources. However, the easiest and most efficient way to find out this information may be to just as US! We can provide you this information swiftly and quickly with as many details as you need.
What if I want to have a professional look at the home before I buy it? What does a home inspector do?

For your own safety, and to make sure you are getting your money’s worth in the home you choose, using a professional home inspector is highly recommended. A home inspector will check a home’s plumbing, heating and cooling, electrical systems, and look for structural problems like a damp or leaky basement. Before you sign any written offer, we will make sure that it includes an inspection clause or other language which says that your purchase obligation is contingent on the findings of a professional home inspector.

Your home cannot “pass” or “fail” an inspection, and your inspector will not tell you whether he thinks the home is worth the money you are offering. The inspector’s job is to make you aware of repairs that are recommended or necessary. A seller may be
willing to renegotiate a price to accomodate needed repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make a clear-headed decision.

Is there any way I can protect myself against emergency repair bills in my new home?
YES. Home warranties offer you protection against many potential costly problems not covered by your homeowner’s insurance. They’ve become increasingly popular in recent years, and for good reason. The coverage can save you thousands in the event of a major mechanical breakdown.
If I’m moving a considerable distance, is there any way I can gather information before I start traveling?
Yes. We are associated with top Realtors across the country. Whether you are moving across town, across the nation, to Mexico, Canada, or the United Kingdom, we can help. We understand your needs, concerns, fears, anxieties, and joys. But most of all, we know how to get you and your family from here to there with minimal stress and inconvenience.
How do I determine the amount of my initial offer?
There is really no rule to use in calculating a realistic offer. Naturally, the buyer wants the best value and the seller wants the best price. Negotiations can be influenced by many factors, such as a seller who may be changing jobs and wants to sell quickly, or a buyer who really wants a specific home. After you’ve looked at the home’s features, asked questions, checked comparable sales, and talked about it with us, you should have a good idea of what the home’s value is in the current market. Consider what you can afford, and make an offer that you consider to be fair. Most buyers and sellers negotiate on price with both sides “giving” a little until both agree.
Can I Get an FHA or VA mortgage?
Just about anyone can apply for an FHA-insured mortgage through banks and other lending institutions. They are particularly well suited for buyers of moderate income; the low down payment requirements (as low as 3.5% of the purchase price) are patched by a relatively low maximum mortgage amount. Similarly, VA-guaranteed loans often require no down payment for up to four times the amount guaranteed by the VA. These loans are reserved for active military personnel, veterans, or spouses of veterans who died of service-related injuries.
What is a good faith estimate?
Your lender or loan agent must provide you with a good faith estimate within three days of your application. This is the information you need to make a fair and accurate judgement when shopping for a loan. Your estimate is a written document that shows all the costs that can be estimated in advance by the lender. You need this information so that there are no surprises on the day you close on the property to be purchased. You should review all costs, know which ones are non-refundable in the event your loan is not approved, and be prepared to pay outstanding fees. You may also want to compare the costs to those charged by other lenders when shopping for your home financing plan.
What does my monthly mortgage payment include? And what does PI and PITI stand for?
The bulk of your monthly mortgage payment goes towards paying off the principal and interest of your loan (often lenders refer to this as “PI” or Principal and Interest). In addition, most lenders require that you pay a sufficient amount to cover your local real estate tax, plus your homeowner’s or hazard insurance (this “total” payment is referred to as “PITI” or Principal, Interest, Taxes and Insurance).
How much of a down payment will I need to buy a home?
A down payment of 20% has been the benchmark for conventional financing. For buyers who qualify for conventional financing but can only put 10 or 15% down, lenders offer this financing with PMI (Private Mortgage Insurance). Designed to protect the lender against default by the borrower, PMI allows you to obtain traditional financing with a down payment significantly lower than the standard 20%.
Are there any mortgages especially designed for the first time buyers?
Today, first time home buyers enjoy a number of mortgage options that make purchasing a home more affordable by minimizing down payments and keeping monthly payments as low as possible during the early years of the loan. Most ARM’s (Adjustable Rate Mortgages) feature an interest rate that is often below market for the first year and may only rise gradually after that, therefore, lowering your house payment in the beginning. VA and FHA-insured loans call for extremely low down payment (0-3.5% of the purchase price) and offer the benefit that 100% of your down payment can come as a gift. Finally, first time home buyers who can find a cooperative seller or third party investor can look into such nontraditional financing methods as a lease/buy arrangement.
What is the difference between pre-qualifying and pre-approval?
Pre-qualifying for a mortgage up to a certain amount is an increasingly popular practice among buyers who don’t want to worry about going through the approval process until after they’ve found a home they want. It is a verbal exchange in which the lender tells you in advance approximately how much money you are able to borrow. Based upon the information a pre-approval goes a step further than pre-qualifying. It is an actual commitment to lend, providing that, when the borrower is ready to buy, he or she still meets all the qualifying conditions that were met at the time of conditional approval. We strongly recommend this!
I’ve heard some things about foreclosures and short sales. How does all of that work?
Foreclosures / Bank Owned / REO listings are properties that are owned by the bank due to the owner’s lack of mortgage payment and foreclosure. These properties are sometimes updated with fresh carpet, paint and appliances, however most of the time they are offered at a discount due to their condition. Short Sales are listings where the owners owe more on the house then what it is worth. The process can be lengthy and complicated to purchase a Short Sale but we are here to help you understand what these properties are, how the process works and how to help you purchase them if you decide to go that direction!