12 Most Common Questions about Real Estate
As a real estate agent, it is your job to assist house buyers and sellers in navigating the process of selling or buying a property. They'll both have a lot of questions for you. Establishing rapport with your client is a crucial component of being an effective real estate agent, which you could have learned from an expert real estate mentor or coach.
To build on that confidence, a real estate agent must be able to respond to any enquiries and assuage their customers' anxieties. You may also help clients by interpreting real estate language, terminologies and slogans.
Some of the most frequently asked real estate inquiries by house buyers and sellers are included here. Use this guide to help you properly address queries from clients.
1. What is the initial stage in the home-buying process?
The primary step in the home-buying process is mortgage preapproval. Obtaining a pre-approval letter from a lender starts the process in the correct direction.
This is why:
First, you must determine how much money you are able to borrow. Understanding how much you can afford reduces online home hunting to eligible listings, so no time is wasted looking at houses that are out of your price range. (Pre-approvals can assist to avoid disappointment from falling in love with overpriced properties.)
Second, your lender's lending assessment will reveal how much cash is necessary for the principal payments and closing charges. You may require additional time to save money, dispose of other valuables, or solicit mortgage gift cash from family members. In any case, you will have a precise impression of what is necessary from a financial standpoint.
Finally, being pre-approved for a mortgage shows your real estate agent and the individual selling their house that you are a serious buyer.
Most real estate brokers will demand a pre-approval before showcasing houses; this is particularly prevalent at the top level of the real estate sector; luxury property sellers will only permit pre-screened (and confirmed) customers to view their homes. This is done to keep "Lookie-Loos" out and to safeguard the seller's confidentiality. Furthermore, by restricting who visits their residence, sellers provide further security against possible criminals.
2. How much time does it take to buy a house?
Buying a property takes roughly 10 to 12 weeks from beginning to end (hunting online to completing escrow). Once a house is chosen and a contract is formed, the escrow term on a home typically lasts 30 to 45 days, given that the market is under normal conditions. However, well-prepared property buyers have been observed to acquire houses faster than that.
Market factors play a significant role in how quickly properties sell. Buying a house in a rising economy with plenty of sales movement may take a bit longer than usual. This is because when business rapidly starts picking up, multiple parties engaged in the deal fall behind. A surge in house sales, for instance, raises interest for property assessments and home inspections, but there is no growth in the amount of assessors and examiners ready to complete the task. If each side in a transaction requires a day or two longer to complete their task, the procedure is delayed.
3. How much do I have to pay a real estate agent to assist me in purchasing a home?
To acquire a home, buyers pay little or no commission to an agent.
This is why:
In most house sales, two real estate agents are involved: one representing the seller and one representing the buyer.
Sellers are represented by listing brokers, who charge a fee to represent them and promote the property. Advertising costs such as radio commercials, print advertisements, television ads, and internet ads may be included in marketing. The residence will also be included in the local multiple listing service (MLS), where other agents in the region (and throughout the country) will be able to look for and locate the home for sale.
The listing broker compensates agents who represent purchasers (a.k.a. buyer's agents) for bringing house buyers to the table. When the house sells, the listing broker distributes the commission with the buyer's agent. As a result, purchasers do not pay their agents.
4. What is the minimum credit score required to purchase a home?
The majority of lending programs demand a FICO score of 620 or above. Borrowers with stronger credit scores pose less risk to lenders, which frequently results in a smaller down payment requirement and a cheaper interest rate. Home buyers with weaker credit ratings, on the other hand, may need to bring more money to the table (or accept a higher interest rate) to mitigate the lender's risk.
5. How much money do I require for a down payment?
The average down payment in the United States is 11%. However, this statistic includes both first-time and repeat purchasers. Let's take a closer look at this.
While the national average down payment is 11 percent, first-time homebuyers typically put down 3 to 5 percent. This is due to the fact that numerous first-time home buyer programs do not demand large down payments. The FHA loan, a long-standing favorite, demands a 3.5 percent down payment. Furthermore, some programs accept down payment donations in the form of a gift from family members.
Some programs need even less. VA and USDA loans can both be obtained with no money down. These methods, however, are more stringent. VA loans are only available to past or current military personnel. USDA loans are only offered to purchasers with low to moderate incomes who live in USDA-eligible rural areas.
Conventional loans demanded a 20% down payment for many years. These loans were generally obtained by repeat buyers who could utilize the equity in their previous house as a source of down payment cash. Conversely, some modern conventional lending programs need only 3% down provided the applicant has private mortgage insurance (PMI).
6. Should I sell my present residence before purchasing a new one?
If the equity in your present house will be used to cover for the down payment on the new property, the former must be sold first.
Some house purchasers prefer to rent out their present home as an investment property. In that instance, the present residence will not be required to be sold. However, your loan adviser will need to assess your risk profile and credit history to decide whether securing a loan on a new house while keeping ownership to the old one is doable.
When transferring to a new place due to a job transfer, buyers frequently have a tight time window to sell their existing house. Whether you're moving but staying with the same company, inquire if they provide relocation aid to help offset some of the costs.
7. How many houses should I look at before making a decision?
That is entirely up to you! Home buying is, without a doubt, easier today than it has ever been. The opportunity to browse for houses online and view images before leaving the comfort of your living room has drastically transformed the home-buying process. The level of convenience has reached an all time high. But nothing matches seeing a house in person to get a sense of how it appears and 'feels.'
8. What exactly is earnest money?
When you submit an offer on a house, your agent will need a check to go with it (checks are the same as cash, and the deposit is usually 1 percent to 2 percent of the total purchase price). Earnest money is given in good conscience to show the seller that the buyer's offer is legitimate. Earnest money basically removes the house from the market and secures it for you.
The check (or cash, in some cases) is placed in a trust or escrow account for safety. If a contract is reached, the earnest money will be allocated to the down payment and closing charges. If the transaction fails, the money is refunded to the buyer.
Take note, if all parties approve of the parameters of an agreement, but the buyer pulls out, the earnest money may not be refunded to the buyer. Inquire with your agent about strategies to preserve your earnest money deposit, such as offer contingencies.
9. How long will it take the seller to react to my offer?
Written offers should provide a timetable for the seller to react. It should be enough to give them twenty-four hours.
10. What if my offer is turned down?
Sellers have the option of accepting or rejecting an initial offer outright. However, there is a third option that is rather common: sellers can start a counteroffer. Keep in mind, a deal isn't over until it's over. So, if the seller makes a counteroffer, you're still in the ballgame. You and your agent only need to go through it to see whether the counteroffer is acceptable. If this is the case, then accepting it quickly closes the deal.
Keep in mind that offers and counteroffers might be exchanged several times; this is not uncommon, and bargaining is part of what realtors do on a daily basis. Each modification should bring both parties closer to an agreement on the conditions of the transaction.
11. Should I avail a house inspection?
Yes! If you intend to finance your house with an FHA or VA loan, you must have a home inspection performed. Inspections are not necessary for other mortgage schemes. Home inspections, on the other hand, are highly suggested since they can discover faults in the home that are not easily spotted. Home inspections provide peace of mind for one of life's most significant investments.
12. Is a final walk-through required?
It is not essential, but it is a fantastic idea! Final walk-throughs allow customers to ensure that nothing has changed after their initial visit. If repairs were required as part of the offer, a follow-up visit ensures that everything is squared up as per the contract's conditions.
These are only a few of the questions people usually ask before buying or selling their estate property. Being a real estate agent is never easy and you need to have and develop winning skills and strategies to close deals. Look for a real estate mentor or enrol in real estate coaching programs to learn how to become successful in this field. Top real estate agent Barry Jenkins – Better Homes & Gardens Real Estate | Real Estate Agents in Virginia Beach, VA will surely go above and beyond and assist you every step of the way, especially when it comes to helping you find the right answers to all your questions.