Below are answers to questions home buyers often ask. Click each question to see the answer.

How much savings do I need to buy a home?
    • The amount of money you have to bring to the closing table depends on several things. Let's break down the costs into the following categories:

Earnest/Deposit Money is the money a buyer puts down to "seal the deal" and show they are a serious buyer. A buyer forfeits earnest money if they break the contract. Earnest money is NOT in addition to the purchase price, so it counts toward the cost of the home. It is usually 1% of the offer price, but this isn't a hard and fast rule. Some people offer much more to show they are serious. Others offer less if they can't afford to put that much down to get started. Earnest money is always expected to enter into an agreement to purchase.

Inspection Costs are usually paid up front and are not refunded if problems are found that kill the sale. Some examples of inspections include general home, septic, termite, electric, roof, pool, etc. This is always a dreaded step in the process because a buyer may fork out $500 for a home inspection only to discover the home has real problems. Inspections aren't mandatory (except for termite inspection, which is required for types of mortgage) but most buyers who waived inspections will admit later that it wasn't a good idea. Inspection costs are rarely allowed to be rolled into the loan, so they must be paid out-of-pocket.

Appraisal Cost pays for an appraisal to confirm to the lender and/or buyer that the home is worth what is being offered in the purchase agreement. Some loans such as VA, FHA, and USDA require an appraisal. Conventional loans may also require appraisal. It is usually paid out-of-pocket, but in some cases may be rolled into the loan. Ask your lender if this is an option.

Downpayment is a portion of the purchase price to be paid up front. Some loan types such as USDA allow 0% downpayment, but most require a minimum of 3-3.5% of the purchase price. Putting down more money (such as 10% or more) can sometimes qualify you for a lower interest rate. Putting down at least 20% can also save you from paying private mortgage insurance.

Am I ready to buy a home?
    • Have you been consistently employed for about a year and had employment for the past 2 years? Is your credit score at least 600? Is your debt to income ratio below 45%? Do you have at least $1000 in savings? If you can answer yes to all of these questions, you may be ready to buy a home. Every lender has its own requirements, but if you answered yes to all of the questions I can offer you some lender names to call. Also check out these

Buying Tips

    for helpful tips related to the home buying process.
Do I need an agent to buy a home?
    You can, but it's not a good idea unless you know what you're doing. You can shop for a home and make an offer home without representation, but as a buyer it doesn't cost you anything and provides you expertise. If you reach out to a listing agent without representation, the listing agent will gladly walk you through the process, but they don't represent you. They represent the seller, unless both the seller & buyer agree to have the agent become a neutral party (facilitator). Your agent knows how to write contingencies that protect you, read contract counteroffers, make sure you don't miss deadlines, and anticipate problems before they happen.
Will I have better luck using multiple agents?
    Quite the opposite. All Realtors have access to the same database, so they're "fishing in the same water." If you ask multiple agents to find you a home and they both send you info on a home you are interested in, which agent closes the deal? And if they find out you're using multiple agents, you may not get the best service from any of them. Instead, commit to one agent who is making the effort and is knowledgeable. Ask for a custom portal with custom searches you can access. They'll be happy to work with you.
Who pays the agent commission?
    • The seller signs a listing agreement that states a commission to be paid to the listing agent. Likewise, the buyer signs a representation agreement that state the commission to be paid to the buyers agent.HOWEVER, the listing agent usually covers the buyers agent commission. The listing agent offers a portion (usually half) of the listing commission if another agent brings a buyer. This means that in a traditional sale, the buyer doesn't pay any commission. Exceptions to this may include a situation where the listing agent isn't willing to share enough of the commission to cover the buyers agent's portion. Another exception may be when a home is being sold without a listing agent (for-sale-by-owner). In either case, prior to making an offer, the buyers agent should notify the buyer that commission won't be covered and funds will be due from the buyer. It is extremely rare that this is the case and when it does happen, the buyer always has the option to ask for seller reimbursement in the offer or not pursue the home.
Why does my agent need a contract if they get paid by the other agent?
    Real estate agents need proof they have permission to represent you in order to get paid. Most agents will show you some homes before asking for a representation agreement, so you can decide if you like them. But if an agent shows you a home and doesn't have a contract, they are open to potential dispute over collecting a commission. Agents don't get paid a salary and don't get a stipend for gas or marketing. All their costs come out-of-pocket and all their income is commission-based.
How long does it take to buy a home?
    The average time it takes to buy a home after signing a contract is 30 days. Cash sales can close much faster (5-10 days) because no lenders are involved. FHA and VA loans often take longer (40-55 days) because of the additional lender inspection requirements of those loan types. A contract may specify more time than is required by the process, however. For example, a seller may need more time to pack and move. A buyer may need to sell and existing home before closing on a new one.
How do I protect myself from buying a home with issues?
    Use contingencies to protect yourself. As a buyer, having an inspection contingency means you have the right to have the home inspected and if you find something you don't like within the time allotted, you can walk away. As long as you follow contract obligations and timelines, you can get your earnest money back.
What are some examples of when buyers lost earnest money?
    Earnest money is forfeited when the buyer doesn't follow the contract as it was agreed to. if you don't stipulate a review of acceptance of subdivision restrictions, and then back out after realizing you can't have chickens, you'll likely lose your earnest money. If your offer is contingent on financing and you are disqualified for a mortgage because you bought a car after being approved, you'll likely lose your earnest money.
How do I buy a home if I already own one?
    • There are several ways to transition from one home to another. The most common approach is making the purchase of the next home contingent on successfully selling the old one. Most sellers will agree to a 30-60 day period, but not usually longer. If your home sells quickly, the closing takes place sooner rather than later. Another option is a bridge loan. This is a temporary loan that you close out after you move and successfully sell your old home. This is a bit riskier if you can't afford to carry a bridge loan if your old home goes unsold. You can also coordinate the sale and purchase of both homes so you close on the old home the same day as your new home. This option works best if you use the same title company for both.
How do I know what a home should cost?
    That's where a good realtor agent comes in. Your agent can run a "comp report" comparing recently sold properties that have similar qualities, such as size, age, and location. With that information, you'll feel confident about your offer.