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5 Common Buyer Questions

1. What's the first step?

Many people think the first step in the home buying process is to find the house you want. Big, strong: NOPE. As a Realtor, I think the best step is always meeting with your Realtor first as they will guide you through the process start to finish.

REALLY, the first step is to speak to a lender. A lender will give you a realistic idea of what you can spend. You may even be approved for more than you want to spend, but knowing your options and setting your own personal budget is the first and best step on a successful home search. Also, in this day and age, most sellers require a Pre-Approval Letter or a Pre-Qualification Letter to be submitted with an offer (or a proof of funds if you’re paying cash)…no one is going to take your word for it that you have the money, they want a bank or a lender to say it.

2. Won’t talking to a lender ruin my credit?

Not really. The lender of your choice will need to do a credit inquiry also know as a hard pull of your credit, which will show up on your report, but it’s not going to be a huge ding and necessary in order to get the process started. Also, if you shop around with multiple lenders at once they can all view the same credit pull, so if you talk to 4 lenders in one week, it’s one pull…not 4. You can also tell different lenders what others are offering you and sometimes they can match or beat the others rates and packages. Now, if you’re having your credit pulled every several months non-stop you are going to see some effects. But most lenders pre-approval letters are good for several months, and if nothing has changed in your finances, they can update them allowing you to make an offer when the right home pops up.

3. How much do I need to put down?

This really relates to point 1 and 2 and finding a lender that can go over all your eligible options…but most conventional financing offers options starting with 3-5% of the purchase price as a down payment. Now, most lenders will require you to pay a Private Mortage Insurance fee (PMI) if you put less than 20% down (essentially making your payment more each month, but allowing you to keep more in your pocket initially) but that fee will go away once you’ve paid enough equity down (though you will have to personally initiate that, it won’t happen automatically).

There are so many options out there, and it pays to shop around. There are even lending packages for professionals like Doctors, Lawyers or even Employee Credit Unions that can can help those that qualify save on the down payment even more.

4. When should I start looking?

Most purchases with conventional financing about 30 days to close, from the execution of the contract (closing is when you sign for the house, money changes hands, and ownership transfers). Built into the 30 days is an option period (time to do inspections, due diligence, etc.). Once an offer is submitted it can likely take a few days to negotiate out the initial add a week.

Then, how familiar are you with the area you want to be? If you know the exact neighborhood/type of house, you can likely find something in a much shorter timeframe. If you’re not sure where you want to be or what type of home you want it can take much longer.

I would say most clients start looking approximately 3-4 months before their target “move-in” date. Now, if you need to sell a house before buying the next one or have an existing lease you can’t break things can get tricky. A knowledgeable Realtor is experienced enough to help develop a realistic timeline that will help you achieve your goals and factoring contingency plans…so it’s never too soon to start discussing your plans with your real estate agent.

5. Who all do I need to recruit for the process?

Just a really good Realtor.

The right Realtor will help you every step of the way. They likely have lending contacts they can share. They know inspectors and will schedule them for you during the option period. They have existing working relationships with title companies and will monitor your transaction progress, they know moving companies, tradesmen, insurance agents, surveyors…they really are your one-stop shop to make sure you have everything you need to make the home-buying process as smooth as possible.

Do you have more questions about the process?

We’d love to hear them.

We pride ourselves on providing the best and most thorough information to our clients and we would love the opportunity to discuss with you how a Bungalow Realty Agent can help you.

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