Buying your first home is a big step that can be exciting, intimidating, and even a little stressful without the right resources. Here at EBG – our goal is to make the buying process as easy as possible for our clients, especially for our first-time buyers. Here are 6 common questions asked by first-time home buyers!
1.) What’s the first step?
One of the most common questions we get from first-time home buyers is, “What’s the first step?” If obtaining mortgage financing, the first thing you want to do is get pre-qualified by a local lender. Research is the key component to finding a reliable lender. Talk to a real estate agent and research lenders in your area – just as you would research your real estate agent.
2.) How much is a buyer’s agent?
In short, you’re never actually writing a check to the buyer’s agent – so there is no fee! For instance, the seller pays the listing brokerage commission; then, the listing brokerage pays out part to the buyer’s brokerage.
“I feel it’s very important to be represented by an agent that is not the seller’s agent. Sometimes, it’s hard for the seller’s agent to treat both parties fairly. The seller’s agent would by default become your agent if you’re buying a property that is listed. For sale by owners would be the true only way to not have any representation, but that can be dangerous since both parties may not understand the contract and other things associated with the transaction.” – Norge Borio, EBG Certified Realtor
3.) Is the down payment part of closing costs?
If you’re new to the buying process, you may be wondering, “what exactly is included in closing costs?” For one, your down payment is NOT part of the closing costs. Closing costs are made up of costs from the title company and costs from the lender. Sometimes, lenders will only give their side of the closing costs since they are unaware of the title company’s fees. It’s best to get estimated closing costs from a realtor so that you have the most accurate estimate possible. Alternatively, the buyer could get a closing cost estimate from the lender and title company.
4.) What does the earnest money deposit go towards?
The earnest money deposit (AKA the hand-money check) is money that you submit with your contract to let the buyer know you’re serious about the purchase. Typically, this is done within 5 days of your signed sales agreement. Be sure to note – your EMD is deducted from your closing costs.
5.) Do I have to waive the home inspection to be the best offer on the table?
As a first-time home buyer, home inspection contingency is always encouraged; however, there are some creative solutions to include inspection, but not hurt your offer. This includes performing a pre-inspection, a pass-fail inspection, and committing to an inspection for information purposes only – meaning regardless of the inspection results, you will not back out of the purchase. If you’re on the fence, think about your market: If it’s a newly built condo, you may be able to get away with no home inspection. On the contrary, if it’s a house built in the 1930s, it would be a good idea to go through with the home inspection.
6.) Make sure to do your due diligence
Above all, it’s important to do your due diligence by adequately researching your lender, real estate agent, seller, and anything else you may be uncertain about. Be sure to carefully review the seller’s disclosure with your agent and address any concerns you may have. Trust your contract and trust your real estate agent – if you don’t, find a new one!