Charles Barger, Managing Broker


What Can I Afford

Dream Home
Make an Offer
Contract to Closing

Frequently Asked Questions

Frequently Asked Questions

Q: Should I rent or buy?

A: To determine whether it makes sense to rent or buy, list reasons for and against each. Can you afford the mortgage payment? Do you need a tax break? Estimate the return on your capital investment, consider your lifestyle and how long you plan to live in the area. Are you frustrated that your rent payment is building equity for your landlord, not you? Do you want to take advantage of appreciation and possibly hedge inflation?

Q: What can I afford?

A: Contact a lender to determine what type of loan is best for you and how much you can afford. Desk top underwriting technology now allows lenders to issue pre-approvals in minutes! Generally your mortgage payment, taxes and insurance should not exceed one third of your gross monthly income.

Q: How much cash will I need to buy?

A: Some financing programs require little or no money down. Be prepared for costs in addition to a down payment. Earnest money or a good faith deposit will generally be required when an offer is made and will be deposited in an escrow or trust account upon contract acceptance. Earnest money should be significant enough to demonstrate that a buyer is serious. Other costs may include credit report, appraisal fee, loan application fee, inspection fees, origination fees, title fees, escrow fees, and homeowner's insurance.

Q: How can I buy with little money down?

A: A number of loan programs are available that require little or no money down. FHA requires 5% or less down. VA for qualified veterans offers 0 money down. First time home buyer programs, state, community, and certain conventional programs are sources of little or zero down options. It may also be possible to finance costs or negotiate seller assistance to minimize cash needed to close.

Q: What are the biggest challenges of buying a home?

A: Paperwork! You may sign and initial over a hundred times to complete the process. The number of decisions to make and time involved will surprise many buyers.

Q: How will I find a home?

A: When home buyers were asked by the National Association of Realtors 82%responded that they relied on a real estate broker/sales associate as source of information during their home search. A real estate professional is integral to relocation process. Print media advertising was cited as being used by about 50%, followed by open houses and for sale signs. Recent research estimates that over 70% of homebuyers will use the internet as a source of information.

Q: Will I save money buying a "For Sale By Owner?

A: At first glance it may appear that a buyer might save the real estate commission. Consider that the seller has the same motive. A real estate transaction is a complicated process. Many do-it- yourself buyers and sellers have found the cost of a poorly managed transaction to be far greater than the perceived commission savings.

Q: How do I make an offer to buy a home?

A: Your offer needs to be in writing. Verbal offers to buy are not binding to buyer or seller. Many purchase offers are a minimum of five pages and some are much longer. Seek professional assistance, and take time to understand the documents. Ask questions. Obtain and review all available and required disclosures. Your offer will not only address price. Typically it will include financing contingencies, inspection clauses, deposit amounts, seller warranties, closing and occupancy dates, and, personal property. Contingency clauses may provide for return of earnest money if the contingency is not satisfied. The offer should be written and reviewed with great care as it may result in a binding contractual agreement.

Q: Should we come in with a low offer? We can always go up.

A: It is unrealistic to expect a home that is priced right and in market ready condition to be sold for under market value. Some homes sell for the asking price and more. Ultimately the sale price of a home will be affected by terms of the contract, market conditions and seller motivation. A low offer may insult the seller, resulting in a break down of negotiations. Understand the value of property and the market. Make realistic offers and negotiate favorable terms.

Q: Do I need disclosures, inspections and a home warranty?

A: Most states have mandatory property condition disclosures for properties sold with the assistance of a licensed real estate professional. Federal laws require the disclosure of known lead base paint hazards when selling or renting homes. Disclosure forms require sellers to answer certain questions regarding known property conditions. Disclosure forms are not a substitute for inspections. An inspection is an independent examination by a professional to discover unknown conditions that neither the buyer nor seller were aware of. It may take a few hours and cost a few hundred dollars, but can save you time and money in the long run. The purchase contract may identify who will be responsible for correcting these defects, if not the contract may be voided or renegotiated. A home warranty provides protection for unexpected repairs during a certain warranty period. It does not cover pre- existing defects and is limited to items stated in the warranty. Not all warranties are alike. Compare the cost, deductible, items covered and effective dates of the warranty.

Q: Should I use a Real Estate Associate?

A: Yes. Buying a home is a complex process. Your real estate associate has a network of professionals including lenders, appraisers, accountants, inspectors, attorneys, title companies, insurance agents, and, contractors to assist you in a smooth transaction. Your associate can help you obtain financing, provide you with information and guidance. Your associate can help you negotiate and assist you in managing the purchase process. Select a licensed professional that will be a capable business partner. Select an associate that specializes in the area you want to live in. Select an associate that can handle all aspects of your transaction. They should demonstrate knowledge, expertise and integrity. Ultimately they can save you time, energy and money.

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