Buying a new home?Here are the answers to some of the most asked questions about buying residential real estate:
1. How much can I afford?
What you can buy depends on your income,current debt, and expenses. A good way to find out what you can afford is to get pre-approved for a home loan.
The pre-approval process will require you to get your financial documents ready and to determine how much your down payment will be.
Lenders consider different factors such as your credit history, debt-to-income ratio, and the size of your down payment when deciding whether to approve you for a loan – and at what rates.
You can use an online mortgage calculator like this one from Realtor.com to estimate your monthly mortgage payments.
2. Can I buy a new home and sell the old one at the same time?
Yes–but it will entail taking on more risk.
Buying a home before you’ve had the chance to sell your previous one can put a big strain on your finances by spreading you out financially.
On the other hand, if you do sell before buying, there’s a chance you’ll end up without a place to call home.
There are ways to make this work. One way is to put a “sale contingency” or a “rent back clause” in the contract.
A “sale contingency” on your purchase offer prohibits the seller from accepting offers other than yours for a specified period of time until you can sell your old home.
A “rent back clause” lets you live in the property you sold for a set amount of days or until you can buy a new one. During this time you can pay rent to the new owner.
Either clause can be negotiated into the contract.
3. How can I be sure the property is a good deal?
The best way to be sure is to do your research. Look at comparable prices of homes with similar size, location, and amenities to the one you’re planning to buy.
If the price of the home your buying is high, you can use your research when negotiating for a better price.
Experienced real estate experts like our team at Southern Realty Partners are experts at determining home values and can identify good deals for you based on a home’s location, features, neighborhood market data,and more.
4. Should I get a home inspection?
Yes.It’s highly recommended that you have a home inspection done even if it’s not required.This minimizes the risk of your having to deal with hidden problems later on.
In most cases, a home inspections will be part of a lender’s requirements so it’s not always optional for buyers.
5. Can I back out of a deal I don’t like?
Yes, a buyer can always back out of a deal.
As long as the reason is covered by a contingency, a buyer can walk away from a deal with their earnest money deposit. But without a valid reason, the deposit can be forfeited.
For example, you can put contingencies on your offer that allows you to back out in situations such as when a home inspection finds problems, or the buyer’s lender values the property for less than the agreed on purchase price.
6. Should I hire a real estate agent?
It’s not required, but hiring a professional real estate agent can vastly improve your entire buying experience.
In property transactions you have to make some of the most important financial decisions anyone can make. It involves complying with a lot of requirements and regulations, weighing plenty of different factors, and paperwork.
Hiring a real estate agent gives you the professional experience you need to handle every step of the buying process, from finding the right property inspectors to negotiating the sale in your favor, and more.
They also have the expertise to warn and protect you from scams and frauds.
Plus, as a buyer, you don’t pay them. Your agent will split the commission with the seller’s agent.