Why should you get a broker? How much do you need to have? Your home buying questions, answered.
Buying a home for the first time often result in pre-purchase jitters, as it should. A property purchase is a big deal, so if you go about it blindly, it might not turn out as well as you want. No matter how much research you do, all the industry mumbo jumbo being thrown around can leave you lost in translation. To shed light on the mysterious world of real estate, here are the answers to some of the most common general questions asked by first-time buyers.
Do I really need a broker to buy a house?
Using a real estate broker is a very good idea considering this is something you’ve never done before. Doing some online research and asking friends can help, but they don’t compare to someone who’s actually a real estate professional. They can let you know the essentials about the neighborhood you’re considering, such as the proximity of hospitals, the type of nearby schools, and the safety of the area. They can work with your budget and find a house that will satisfy you, and they can even help save you money by striking a deal with the seller.
How much money should I have to buy a house?
That depends. You can’t just lay out a number because aside from the actual cost of the house and the mortgage, there are a lot of costs to consider. Earnest money, for instance, is the deposit that you offer to a seller to show your interest in their property. The down payment, which is usually 3-20% of the price of the home, needs to be paid when you reach the settlement stage. You also need to remember closing costs, which you pay when you take out a loan. Then there are the homeowners’ association fees and your monthly bills. Make sure you also factor in renovation and repair costs.
Where do I go to get a loan?
You can approach banks, government agencies, credit unions and private mortgage companies and more. One lender may have a different set of qualifications and requirements from another, so make sure you familiarize yourself with their policies. If you’re a self-confessed shopaholic, then this is where your skills will come in handy: shopping around can get you the best deal available because different lenders offer different loan fees, interest rates, and payment terms.
Can I offer an amount lower than the seller’s asking price?
Sure, but you’ll have to consider some things first before you do:
a. Is the asking price similar to neighboring houses for sale?
b. How good is the condition of the home?
c. Has the home been on the market for a long time?
d. How much mortgage will you need?
e. How desperate are you to buy the house?
Mull these factors over, and then come up with a fair amount. Remember, your offer will have a better chance of being accepted if it’s close to the asking price.
What if the seller says “no”?
You wouldn’t be the first one. You can either look somewhere else, or you can go back to the seller with a higher offer. You might have to go back and forth with the seller on negotiations, which is perfectly normal, since you both want a good deal. Don’t get caught up in a price war, though, or you might lose track of what you can actually afford.
Image courtesy of artur84 / FreeDigitalPhotos.net