Frequently Asked Questions
When it comes to buying or selling a home, we know that everyone has questions, and it’s important for you to at least have some idea of how the process works. The professional real estate agents at Anne Townes have answers to specific frequently asked questions you might have about real estate home buying and selling.
When is The Best Time to Sell a Home?
There typically isn’t, but the number of buyers that are looking tends to increase in the first six months of the year. That is in part because many buyers have school-age children and managing the purchase of a new home and the sale of their present one during the summer months allows more flexibility.
What Steps do I Need to Take to Get My Old Home Ready to Sell?
Making your home “Sale Ready” is a very important step. As we usually ask a seller – Why typically are there model homes for a new building community? Because buyers want to envision themselves in a nicely updated, decorated, clean, and organized home. Spending time, money, and energy to get your home ready is always a smart move. Most people are not looking for the fixer-upper If they are then the price for that home is usually priced per condition.
Listening to your realtor regarding what improvements would be the best to do if your home needs updates. At Compass, we offer a unique program that assists sellers. Typically, most sellers have a ton of equity in their homes. Compass Concierge is a program that will allow a seller the ability to get the updates completed. These updates are paid at settlement and when qualified this is a no-fee, no interest to the seller. It’s painless and easy and studies show sellers will get a higher appreciation on the sale of their home.
What Credit Score Do I Need to Buy a Home?
Most loan programs require a FICO score of 620 or better. Borrowers with higher credit scores represent less risk to the lender, often resulting in a better interest rate and better loan terms. Conversely, home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender’s risk.
How Long Does it Take to Buy a Home?
From start (searching online) to finish (closing escrow), buying a home typically takes about 10 to 12 weeks. Once a home is selected and the offer is accepted, the average time to complete the escrow period on a home is 30 to 45 days (under normal market conditions). Though, well-prepared home buyers who pay cash have been known to purchase properties faster than that.
Market conditions are a major factor in how fast homes are sold. In hot markets with a lot of sales activity, buying a home may take a little longer than normal. That’s because several parties involved in the transaction get behind when business suddenly picks up. For example, a spike in home sales increases the demand for property appraisals and home inspections, yet there will be no increase in the number of appraisers and inspectors available to do the work. Lender turn-around times for loan underwriting can also slow down. If each party involved in a deal takes a day or two longer to get their work done, the entire process gets extended.
Are There Any Additional Steps I Need to Take if I’m a First-Time Homebuyer?
Getting pre-approved for a mortgage is the first step of the home buying process. A pre-approval letter from a lender will allow you to realize how much you can borrow. Knowing how much home you can afford narrows down online home searching to suitable properties, so no time is wasted considering homes that are not within your budget. (Pre-approvals also help prevent disappointment caused by falling in love with unaffordable homes).
Second, the loan estimate from your lender will show how much money is required for the down payment and closing costs. You may need more time to save up money, liquidate other assets or seek mortgage gift funds from family. In any case, you will have a clear picture of what is financially required. Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to both your real estate agent and the person selling their home. Lastly, most real estate agents will require a pre-approval before showing homes. In real estate, the definition of a buyer is ready, willing, and able. Being able sometimes can be the hardest part and sellers want to be assured that you are serious when they open up their home for a tour.
What is a Buyers Market in Real Estate?
A buyer’s market is characterized by declining home prices and reduced demand. Several factors may affect long-term and short-term buyer demand, like:
- Economic disruption – a big employer shuts down operations, laying off their workforce.
- Interest rates trending higher – the amount of money people can borrow to buy a home is reduced because the cost of money is higher, thus reducing the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals.
- Short-term drop in interest rates – can give borrowers a temporary edge with more purchasing power before home prices can react to the recent interest rate changes.
- High inventory – a new subdivision and can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features (modern appliances, etc.)
- Natural disasters – a recent earthquake or flooding can tank property values in the neighborhood where those disruptions occurred.
What is a Sellers Market in Real Estate?
In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:
- Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
- Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first-time homebuyers who can afford bigger homes as the cost of money goes lower.
- A short-term spike in interest rates – may compel “on the fence” buyers to purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded.
- Low inventory – fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.
Should I Order a Home Inspection on a Home I’m Buying?
Yes! Home inspections are required if you plan on financing your home with an FHA or VA loan. For other mortgage programs, inspections are not required. However, home inspections are highly recommended because they can reveal defects in the home that are not easily detected. In the event of multiple offers, many buyers will waive the inspections to be more competitive, but home inspections do bring peace of mind to one of the biggest investments of a lifetime.
Do I Need to do a Final Walk-Through Right Before Settlement?
It’s not required, but it’s a very good idea! Final walk-throughs give buyers a chance to make sure nothing has changed since their first visit. If repairs were requested, as part of the offer, a follow-up visit ensures that everything is squared-away, as expected, per the terms of the contract. Also, the buyer will want to make sure systems are in working order before settlement.
If you have any additional questions, the experts at Anne Townes, Chester County, PA premier real estate agents, are happy to help. Feel free to give us a call or you can fill out our contact form online and we will be in touch.