The Top Five Homebuyer Questions I'm Always Asked

After 18 years of working as a real estate agent, you can imagine I've worked with quite a few home buyers. While everyone naturally comes to me with questions when first starting their house hunting journey, there are a few that always seem to crop up. In this post, I've compiled the top five home buyer questions I'm always asked with answers I think can really help.  

5. How long will it take to close on the house once my offer is accepted?

In the past, the average home sale has taken between 30 to 45 days from the date of contract signing until closing. However, some homes sell faster than others, depending on the market conditions. In today's market, the time for the closing process has shrunk significantly with the process being complete in 30 days or less in some instances.

Even though homes are selling quickly in the current market, you should be wary of FOMO (fear of missing out) and making concessions you may regret later. Choosing a great real estate agent can help you tremendously in navigating the current market and they can help advise you whether to take the plunge on a certain home. 

4. Do I have to get pre-approved?

Many of my past home buyers have been pretty confident where they stand financially, and don't feel they need to get pre-approved until they find a home they're interested in. Many also believed it would hurt their credit score if they got pre-approved before starting their home search.

But there could be surprises.

In today's market, there may not even be time to get pre-approved once you find that perfect house before it goes under contract with someone else. And these days, a seller won't even entertain an offer on their home without the potential buyer being pre-approved.

So, yes, you should always get pre-approved before beginning your home search. This is one of the top mistakes homebuyers make and it's my recommendation whether it's a buyer's OR a seller's market. It's just good practice to be aware of how much home you can afford so you're aware of your budget and wiggle room. 

By providing information about your income, assets, debts, and employment history, the mortgage lender will use this information to determine whether they'll approve you for a loan and for how much. If you wait until after you've found a home you're in love with, you could be setting yourself up for some serious disappointment.

3. How much money will I need?

First, the obvious: Buying a home costs money. Before the pandemic, the average price for a single-family home in the U.S. was around $250,000, which included closing costs, taxes, insurance, and other fees.

However, the real estate market has been on an upward trajectory since the pandemic began with people seeking homes with extra space for their families and home offices. After the housing inventory became strained with fewer homes available, home values began to rise significantly. With low inventory and high demand, buyers have had less flexibility in bargaining once they find a home they want.

With that being said, unless you're planning an all-cash offer on your home, there are definitely some things you'll need to bring to the table:

Down Payment

While there are a number of down payment assistance programs available, I'd recommend having some sort of down payment saved in the current market. While a 20% down payment or more will make your offer stronger, it’s more important to have some amount available to help with your loan terms and the offer on your home.

Closing Costs

This isn't the type of housing market to ask the seller to pay your closing costs so you should expect to pay between 2%-5% of the home's purchase price. 

Inspection Fees

Home Inspections, CL100, and any miscellaneous inspections you need to feel comfortable with your offer.

Additional Costs

Other costs you should factor into your home purchase are moving expenses, property taxes, homeowners insurance, home warranty, HOA fees, and PMI (Private Mortgage Insurance) if necessary.

2. Should I wait until the market changes?

One of the top questions about selling a home I get is WHEN you should list a home. So, it makes sense that buyers are interested in WHEN they should buy and if they should wait.

Trying to wait out the market to shift in your favor is an option, sure. However, the facts are we don't know when or even if the housing market will change in the near future. 

Interest rates are expected to increase in 2022, although we're not sure by how much. This makes affordability a concern that moves front and center for home buyers. My recommendation is to take advantage of the lower interest rates now if you can.

Ultimately, your finances and personal situation should dictate whether you jump into the housing market now or later. If something comes along that fits your needs and price range you may want to make an offer before it's gone.

Ask yourself these questions if you're wondering if you should buy this year:

• • Are your monthly debt payments around 35% or less of your monthly income?
  • Do you have an emergency fund to cover 3-6 months of expenses?
  • Does your budget keep your monthly mortgage payment at 25% or less of your monthly income?
  • Do you have some sort of down payment saved?
  • Do you have 2-5% of your budgeted home price ready to cover your closing costs?

If you can answer yes to all these questions, you should consider jumping into the housing market as it may be the best time for you to buy a home. If the answer is no to one or more - you should seriously consider waiting until you can.

Not only that, with housing inventory expected to stay tight in 2022 you may not have much of a choice but to wait for something you love to come along.

My final bit of advice is to find the best real estate agent you can to help you navigate the current market with your best interests in mind. They should make you feel comfortable about the process and they shouldn't make you feel pressured into a huge financial decision that doesn't feel right. 

1. How much should my offer be to get this house?

This is the number one question I'm asked by buyers once they find a house they love - and it's a great question. The quick answer is: It depends.

There are a few factors to consider when deciding how to make the best offer to make on a home. Not the least of which is simply how badly do you want the home? But, other factors come into play that are just as important:

• • Are you willing to go to the top end of your budget to get the home?
  • What are the current market conditions like?
  • What are comparable homes selling for in the area?
  • Are you prepared to pay the difference if the home appraises lower than your offer or lower than the contract price?

In a strong seller's market, as it is right now, you should be prepared to offer above the asking price to increase your chances of winning the sale. It's going to be a very rare case in which there aren't multiple offers on a home - and if the home is priced attractively, you can bet multiple offers will be on the table.

There are strategies to help keep your offer as low as possible. An "Escalation Clause" sets a maximum price you're willing to offer on the home and your counter-offers will only increase incrementally up to that amount before you walk away. This allows you to stay within your buying budget and not end up overpaying for the home.

Again, lean on your real estate professional to advise you on this decision. They'll be aware of your budget, what the market is like, and they should also be aware of what comparable homes in the area have sold for. All this info will help you make the best offer you can in a seller's market.

Final Thoughts on Home Buyer Questions

Hopefully, this post answered some of the same questions you have about buying a home. And if it brought up some new questions you hadn't thought about, great! Having as much knowledge as possible will help you be prepared for the home buying process and keep the process as stress-free as possible.

If you have any questions about the home buying process I didn't answer here, don't hesitate to get in touch via email, text or phone - I'd be happy to help!