Real Estate FAQs

Frequently Asked Real Estate Questions with Jane Unhammer

As you might imagine, real estate agents, field quite a few questions every day. People are naturally curious, and it’s an agent’s job to guide folks through the often-complex world of home buying and selling. You might also imagine that some questions about real estate come up more often than others. Whether you’re a first-time buyer or a repeat buyer who could use a refresher on how deals get done, here are some answers to frequently asked real estate questions.

How Do I Start the Home-Buying Process?

The first step of the home-buying process is typically to determine your budget and get pre-approved for a mortgage. This involves working with a lender to get a mortgage pre-approval letter, which is a document that states how much the lender is willing to lend you to buy a home.

Having a pre-approval letter can help you to understand how much you can afford to spend on a home and can also make you a more competitive buyer when you start looking for properties. It is a good idea to start this process early on so that you have a clear idea of your budget and can move quickly when you find a home that you want to buy.

Other steps that may be involved in the home-buying process include:

• Researching the housing market to identify the areas and types of properties that you are interested in
• Finding a real estate agent to work with
• Searching for properties and making a list of potential homes to visit
• Visiting properties and making an offer on a home
• Negotiating the terms of the sale with the seller
• Obtaining a mortgage and closing on the home.

Overall, the home-buying process can be complex and involve many different steps. It is important to do your research, work with professionals, and be prepared to be patient as you search for the right home.

How Long Does the Home-Buying Process Take?

The length of time it takes to buy a home can vary significantly depending on a variety of factors, such as the availability of properties in your area, the competitiveness of the housing market, and your personal circumstances. In general, it can take anywhere from a few weeks to several months to buy a home, although it is not uncommon for the process to take longer.

Here are some factors that can influence the length of time it takes to buy a home:

• The availability of properties: If there are many properties available in your area, you may be able to find a home more quickly. However, if there is limited inventory, it may take longer to find a home that meets your needs.
• The competitiveness of the market: If you are in a buyer’s market (where there are more properties available than buyers), you may be able to negotiate a better deal and the process may be quicker. On the other hand, if you are in a seller’s market (where there are more buyers than properties), you may need to be more competitive and the process may take longer.
• Your personal circumstances: Your personal circumstances, such as your budget, the type of home you are looking for, and your readiness to make an offer, can also influence the length of time it takes to buy a home.

Overall, it is important to be patient and to understand that the home buying process can take time. By working with a real estate agent, getting pre-approved for a mortgage, and being prepared to move quickly when you find a home that you like, you can increase your chances of finding the right home in a timely manner.

What is a seller’s market?

A seller’s market is a real estate market in which there are more buyers looking to purchase properties than there are properties available for sale. This can lead to increased competition among buyers and higher prices for properties.

In a seller’s market, sellers have more leverage and may be able to negotiate higher prices for their properties. Buyers may need to be more competitive and may need to be prepared to make quick decisions and higher offers in order to secure a property.

Factors that can contribute to a seller’s market include:

• Low unemployment rates and a strong economy
• Limited inventory of properties for sale
• High demand for housing in a particular area
• Low mortgage interest rates, which can make it easier for buyers to afford homes.

Overall, a seller’s market can be challenging for buyers, but it can be a good time for sellers to sell their properties. It is important for buyers to be prepared and to work with a real estate agent to understand the market and to find ways to make themselves more competitive.

What is a buyer’s market?

A buyer’s market is a real estate market in which there are more properties available for sale than there are buyers looking to purchase them. This can lead to less competition among buyers and lower prices for properties.

In a buyer’s market, buyers have more leverage and may be able to negotiate lower prices for properties. Sellers may need to be more flexible and may need to be prepared to accept lower offers in order to sell their properties.

Factors that can contribute to a buyer’s market include:

• High unemployment rates and a weak economy
• An excess of properties for sale
• Low demand for housing in a particular area
• High mortgage interest rates, can make it more difficult for buyers to afford homes.

Overall, a buyer’s market can be a good time for buyers to purchase properties, as they may be able to find good deals and negotiate lower prices. It can be a more challenging market for sellers, as they may need to be more flexible and may have to accept lower offers for their properties.

What is a stratified market?

A stratified market refers to a market in which there are different segments or sub-markets that operate independently of each other. In real estate, a stratified market can refer to a market in which different segments of the housing market, such as luxury homes, mid-priced homes, and affordable homes, are operating independently of each other.

In a stratified market, the conditions in one segment of the market may be very different from the conditions in another segment. For example, in a real estate market with a high demand for luxury homes and a low demand for affordable homes, the luxury home market may be a seller’s market (with more demand than supply) while the affordable home market may be a buyer’s market (with more supply than demand).

Overall, a stratified market can be more complex than a market with a single segment, as the conditions in each segment may be very different from each other. It is important for buyers and sellers to understand the conditions in the specific segment of the market that they are interested in in order to make informed decisions.

How Much Do I Have to Pay My Real Estate Broker?

The amount that you will need to pay a real estate agent to help you buy a house will depend on the specific terms of the agreement that you have with the agent and the laws in your state.

In most cases, the seller of the property will pay the commission for both the seller’s agent and the buyer’s agent. The commission is typically a percentage of the sale price of the property and is usually split between the two agents.

As a buyer, you are not typically required to pay anything directly to the agent. However, it is a good idea to discuss the terms of the agreement with the agent upfront so that you have a clear understanding of what is expected.

It is also worth noting that in some cases, buyers may choose to work with a buyer’s agent who represents their interests and helps them to find and negotiate the purchase of a property. In these cases, the buyer’s agent may charge a fee for their services, which could be a flat fee or a percentage of the purchase price. Again, it is important to discuss the terms of the agreement upfront to ensure that you understand any fees that may be involved.

What is the Required Credit score to buy a home?

The credit score that you need to buy a home will depend on the specific requirements of the lender that you are working with. In general, lenders prefer to work with borrowers who have good credit scores, as this can indicate to them that the borrower is more likely to make timely payments on their mortgage.

A credit score is a numerical representation of your creditworthiness, based on your credit history. It is used by lenders to help assess the risk of lending to you. Credit scores range from 300 to 850, with higher scores indicating lower risk to the lender.

While there is no specific credit score that is required to buy a home, most lenders prefer to work with borrowers who have credit scores of at least 620 or higher. However, some lenders may be willing to work with borrowers who have lower credit scores, depending on the specific circumstances of the borrower and the loan.

It is a good idea to check your credit score before applying for a mortgage to get an idea of where you stand. You can check your credit score for free through a number of online credit reporting agencies, such as Credit Karma or Credit Sesame. If you have a lower credit score, you may need to work on improving it before applying for a mortgage. This can involve paying off outstanding debts, paying your bills on time, and correcting any errors on your credit report.

How Much Money Do I Need for a Down Payment on a House?

The amount that you will need for a down payment on a home will depend on the specific terms of the mortgage that you are obtaining and the type of loan that you are using.

In general, a down payment is a percentage of the purchase price of the home that you are required to pay upfront, in addition to the mortgage loan. The down payment is typically paid at the time of closing, when the property is transferred to the buyer.

The amount of the down payment can vary, but in general, most lenders require a down payment of at least 3.5% of the purchase price of the home for a Federal Housing Administration (FHA) loan, and at least 5% for a conventional loan. However, some lenders may require a higher down payment, depending on the specific circumstances of the borrower and the loan.

It is important to note that the larger the down payment, the lower the risk to the lender and the more likely you are to be approved for a mortgage. Therefore, it can be beneficial to save as much as you can for a down payment, as this can help you to secure a lower interest rate and monthly payment on your mortgage.

Should I sell my current home before buying a new one?

Whether you should sell your current home before buying a new one will depend on your specific circumstances and goals. Here are a few things to consider when deciding whether to sell your current home before buying a new one:

• Timing: If you have already found a new home that you want to buy and you are confident that you will be able to sell your current home quickly, it may make sense to sell your current home first. However, if you are not in a rush to sell your current home or if you are not sure when you will be able to find a new home, it may be better to wait.
• Finances: Selling your current home before buying a new one can help you to avoid carrying two mortgages at the same time, which can be financially challenging. However, if you are able to secure a mortgage that allows you to make a smaller down payment or if you have sufficient savings to cover the cost of two mortgages, it may not be necessary to sell your current home first.
• Personal considerations: There may be personal factors that influence your decision to sell your current home before buying a new one. For example, if you are moving to a new city or state and need to sell your current home in order to relocate, it may make sense to sell your current home first. On the other hand, if you have a strong emotional attachment to your current home or if you are not sure where you want to move next, it may be better to wait.

Overall, the decision to sell your current home before buying a new one will depend on your specific circumstances and goals. It is important to carefully consider the pros and cons and to work with a real estate agent to help you make the best decision for your situation.

How many homes should I view before buying one?

There is no specific number of homes that you should view before buying one, as the right number will depend on your specific circumstances and goals. Here are a few things to consider when deciding how many homes to view before buying one:

• Your budget: If you have a specific budget in mind, it may be helpful to view a larger number of homes in order to get a better sense of what is available in your price range. This can help you to find the best value for your money and to make a more informed decision.
• Your needs and preferences: It is important to have a clear idea of the type of home that you are looking for and what is most important to you. This can help you to narrow your search and to focus on viewing homes that are most likely to meet your needs. Viewing a smaller number of homes that are closely aligned with your preferences may be more effective than viewing a larger number of homes that are not as well suited to your needs.
• The housing market: The conditions of the housing market can also influence how many homes you should view before buying one. If you are in a seller’s market (where there are more buyers than properties), it may be helpful to view a larger number of homes in order to find one that meets your needs and that you can afford. On the other hand, if you are in a buyer’s market (where there are more properties than buyers), you may have more options to choose from and may be able to view a smaller number of homes before making a decision.

Overall, the number of homes that you should view before buying one will depend on your specific circumstances and goals. It is important to be patient and to take the time to find the right home for you.

What is earnest money?

Earnest money is a deposit that a buyer makes when they make an offer to purchase a property. The earnest money is typically held in escrow by a third party, such as a title company or a real estate agent, until the sale of the property is completed.

The purpose of earnest money is to show the seller that the buyer is serious about purchasing the property and to provide some financial protection to the seller in the event that the buyer decides not to follow through with the purchase. If the sale goes through as planned, the earnest money is typically applied toward the down payment or closing costs of the property.

The amount of the earnest money deposit can vary, but it is typically a small percentage of the purchase price of the property. In most cases, the earnest money is refundable to the buyer if the sale does not go through due to circumstances beyond the buyer’s control, such as if the seller is unable to secure financing or if the property does not appraise at the agreed-upon price.

Overall, the earnest money is a common part of the home-buying process and is used to show the seller that the buyer is serious about purchasing the property and to provide some financial protection to the seller.

How Long Does the Seller Have to Respond to My Offer?

The length of time that the seller has to respond to your offer will depend on the specific terms of the offer and the laws in your state. In most cases, the seller will have a certain number of days to review the offer and decide whether to accept it, reject it, or counter it with a revised offer.

It is a good idea to discuss the timeline for responding to the offer with your real estate agent before making the offer. This can help you to understand the seller’s expectations and to plan accordingly.

If the seller does not respond to the offer within the specified timeframe, the offer may be considered null and void. In this case, you may need to make a new offer or move on to a different property.

Overall, it is important to be patient and understand that the home-buying process can take time. By working with a real estate agent and being prepared to negotiate, you can increase your chances of reaching a successful agreement with the seller.

What if my offer is rejected or Countered?

If your real estate offer is rejected or countered by the seller, it means that the seller is not willing to accept your offer as it stands. If your offer is rejected, the seller will typically inform you that they are not interested in your offer and will not be entering into a contract with you.

If your offer is countered, the seller will typically provide you with a revised offer that includes changes to the terms of the sale. The seller may ask for a higher price, request that certain conditions be met, or suggest changes to the closing date or other terms.

If you receive a counteroffer, you have the option to accept it, reject it, or make a counteroffer of your own. It is a good idea to discuss the counteroffer with your real estate agent and to carefully consider the terms before making a decision.

Overall, if your real estate offer is rejected or countered, it does not necessarily mean that the sale is off the table. You may have the option to negotiate with the seller and come to an agreement that works for both parties. It is important to be flexible and to understand that the home-buying process may involve some negotiation.

What is a Home Inspection and Final Walk-Through in a Real Estate Deal?

A home inspection is a comprehensive evaluation of a property’s condition, conducted by a professional home inspector. The purpose of a home inspection is to identify any defects or issues with the property that may not be immediately visible to the buyer.

During a home inspection, the inspector will examine the property’s structure, systems, and appliances to ensure that they are in good working order. This may include checking the foundation, roof, electrical and plumbing systems, heating and cooling systems, and appliances. The inspector will also look for any signs of pests or other damage.

The buyer typically pays for the home inspection and has the option to attend the inspection in order to learn more about the property and ask questions. The inspector will provide the buyer with a written report detailing their findings, including any issues that they have identified and any recommendations for repairs or maintenance.

A final walk-through is a final inspection of the property that is typically conducted by the buyer a few days before the closing of the sale. The purpose of the final walk-through is to ensure that the property is in the same condition as it was when the offer was accepted and to confirm that any agreed-upon repairs or maintenance have been completed.

During the final walk-through, the buyer has the opportunity to inspect the property one last time and to ensure that it meets their expectations. If the buyer identifies any issues during the final walk-through, they may have the option to negotiate with the seller to have the issues addressed or to request credits or repairs at closing.

Overall, a home inspection and final walk-through are important steps in the home buying process and can help the buyer to understand the condition of the property and to identify any issues that may need to be addressed before closing.

Ready to Buy Your Dream Home?

If you’re ready to explore buying a home further contact your Denver real estate expert today. I’m ready to assist you in the purchasing process and get you into your dream home.