We Answered Your Biggest House Hunting Questions
Whether you’re buying your first home or your seventh, it’s easy to get overwhelmed by the home-buying process. Putting in an offer for a home is a giant decision, and there are a lot of factors to consider. The best way to reduce stress when buying a new home is to be informed. If you know what to expect, the process doesn’t feel so chaotic. To help you along the way, we’ve put together a guide, answering the big questions most home buyers have.
Should I talk with a mortgage lender before touring homes?
Yes! Getting a mortgage pre-approval is an absolute must. Even if you’re just touring for fun, you never know when you’ll stumble upon your dream home. Be armed with pre-approval so that no other buyer can beat you to an amazing deal. Mortgage pre-approval takes time (usually around 10 days!). Being approved ahead of time will save you some heartbreak. Save yourself some heartbreak. Find your mortgage broker and get pre-approved before you even start touring.
Should I buy another house before selling my current home?
Unfortunately, there is no right answer to this question. There are pros and cons to each option.
- It can reduce timeline stress
- You can buy a home you love. There’s no buying because “you just need somewhere to go” after closing day.
- You don’t have to worry about leaving the house during prospective tours, or scrambling to clean your daily clutter.
- There is no way of knowing how quickly your home will sell.
- You run the risk of getting stuck paying two mortgages until you sell your old house.
- If you’re unable to purchase a new home without selling your old house first, any offer you make on a new home will be “contingent on the sale and title transfer of your current home”. If your home doesn’t sell quickly, you could get bumped by a non-contingent buyer.
- You potentially give up your position of power in the negotiation stage.
How much home can I afford?
Your mortgage lender will help you out with this question in more detail. But be aware- just because you were pre-approved for a $900,000 home, doesn’t mean you should buy this expensive. We always advise clients to avoid becoming house poor.
It’s no fun to have a gorgeous home if you can’t furnish, decorate, or buy food for dinner parties to show it off.
We recommend using an affordability calculator to get a better idea of how much your monthly payment will be. The best practice is for your debt payments to be no more than 35% of your monthly income.
Do I really need a realtor?
It’s tempting to want to save money on commission fees, but be wary of this. Attempting to buy a home without a realtor can get very complicated. Buying a home is a legal transaction. There is a lot of paperwork that must be accurately completed throughout the process. A licensed real estate agent will ensure the process goes smoothly and quickly. They also have your back during the negotiation process. You stand the highest chance of getting a great deal if you have a trusted real estate agent on your side.
Who pays the realtor?
Well, buyer, you’re in luck! Typically the seller pays commission fees. Be sure to confirm this with your real estate agent before assuming this is true in your case.
What are major maintenance red flags?
The “big ticket item” maintenance issues are:
I’m interested in a home. How do I know what utility bills will look like?
You can request a year’s worth of utility bills from the seller of the home. You can also request these documents directly from your local utility company.
How do I know if I’m getting a good deal?
To feel confident you’re getting a good deal, calculate the price per square foot. Use this formula:
Listing price ÷ square footage = price per square foot
$400,000 ÷ 2,500 square foot home = $160/ square foot
Once you have this calculation, compare it to other homes in your area. How does it compare? You can also use national and local averages as a frame of reference.
- The average price per square foot in the U.S. is $202
- The average price per square foot in Kentucky is $118
If the home you’re considering is between these numbers (maintenance is minimal!) you can feel confident that you’re getting a good deal.
What is earnest money?
Earnest money is a show of good faith. When you make an offer on a home, you put down a sum of money to show that you’re serious about buying that home. It acts as a deposit. It’s usually 1-4% of the purchase price.
I changed my mind about buying a home. Can I get my earnest money back?
You can get your earnest money back if:
- The home doesn’t pass inspection
- The home appraises for under the sale price
- You’re unable to secure a mortgage
- The home has title search issues
How long does a seller have to accept or deny my offer?
Legally, there is no time frame in which a seller must respond to your offer. But the unspoken rule in the industry is 48 hours.
What do I do if my offer is rejected?
Did the sellers give you a counter offer? If so, you can:
- Accept the counteroffer
- Submit another counter offer
- Move on
If the sellers did not offer a counter offer, you can submit a counter offer of your own, or you can just move on.
I’m not happy with the results of the inspection. What are my options?
If the home failed its inspection you have a few different options:
- You can back out of the contract with no penalty (you’ll get your earnest money back!)
- You can re-negotiate the sale price.
- You can require that the seller makes any repairs before selling.
Are final walk-throughs mandatory?
Nope! They’re not mandatory. But they’re a good idea. It gives you a chance to check out any maintenance repairs. Inspect the property with a critical eye, without any pressure from the sellers or the seller’s agent.
My offer was accepted. How long until I can move in?
Typically, house closings take 30-45 days. But it can take up to 60 days.
Did we miss something?
Let us know! There’s no such thing as a silly question. We’d love to help you out in any way we can.