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Questions Homebuyers Ask Before & During The Search

What home can I afford?

That depends, of course—on your income and other financial obligations; plug them into a Home Affordability Calculator for a ballpark figure. And do it before you start shopping.  If you see houses you love outside your price range, it opens you up to disappointment.  Meet with a lender to get pre-approved for a home loan (added bonus: pre-approval makes you much more attractive to sellers).

Can I buy a home and sell my current one at the same time?

Yes, you can — but it's the real estate equivalent of walking a tightrope. This is one of the trickiest questions to answer. On the one hand, if you buy a home before you sell the one you're in, you're overextended financially.  If you sell before you buy, you might need to rent awhile before finding a new place. But there are ways to do both at once, and one option is to insert a “home sale contingency" in your contract. This means you only agree to buy a home if you can sell the one you're in. The downside sellers may not agree, especially if the market is hot and there is lots of buyer competition.

How many homes should I see before making an offer?

While home shoppers these days can look at hundreds of homes online, they only hoof it to check out 10 homes on average, before they put in an offer. But keep in mind, this varies tremendously for each person, as some people find their home within hours of hunting. For others, it takes months. If you want to streamline the process, it can help to really hone in on a particular neighborhood you're keen on.  That said, if you feel limited by your options, it may be time to expand to surrounding areas.

What do you think the seller will accept as a fair price?

As a rule of thumb, knocking 3% off the list price won't ruffle any feathers, but may not be the case in a busy market.  Sometimes you have to be prepared to go in over asking price. If it's been sitting on the market for months, you can venture below that, but the bottom line is, you never know how low a seller will go, as they all  have different motivations for selling. If the sellers are eager to move, you could luck out and score a deal.




 Writing The Contract – Required Items 

The date and amount of deposit (earnest money).

Your name as buyer and the property owner's name as seller.

The total purchase price. (are you using an escalation clause?)

Full legal description (warranty deed) and street address of the property.

The brokers and others involved in the sale; who is representing what party?

The options available to both buyer and seller should either party default.

Key Contingency Clauses

Your offer contract should also contain important protective and escape clauses making the entire agreement contingent on, their fulfillment.

Earnest Money
Ensure that your earnest money (a check you give to show your serious about buying) will be deposited in a trust account or with a neutral third party, such as a title company, escrow service or attorney acting as an escrow agent.

Returning Earnest Money
Set out any conditions for return of your money, including how quickly you'll get it back if the offer expires or you withdraw it, or if for some reason the seller decides not to sell.  Make sure you know how you can get your earnest money back and when it may be deemed as non-refundable.

Deed and Title Condition
Your offer should state the type of deed and condition of title you'll accept from the seller. Your contract should also make clear what actions the seller must take to deliver a good title by settlement, and what recourse you have should that not occur.

Make your offer contingent on getting a written loan commitment within a specified time and at terms agreeable to you.

Settlement Date and Possession
The sale should be made subject to a settlement date and when you will be entitled to take physical possession of your new home. Settlement usually correlates with the length of time that's required for a title search and mortgage approval -- typically 30 days. Possession usually occurs immediately after settlement.

Settlement Agent
The contract usually specifies the attorney or title company that will perform final settlement services.

Sale of Current Residence
If your purchase of this house is contingent on the sale of another, this should be carefully stated.

Response Time Limit
Your contract should require the seller to accept the offer in writing within a certain time -- usually no more than 24 to 48 hours.  This may vary by market.  Contract is void if the seller doesn’t respond before the deadline.

Home Inspection
This contingency clause gives you the right to have the property inspected (this will cost you about $400 to $500) and allows you to withdraw your offer if the inspection report isn't satisfactory to you for any reason. It also allows to request repairs be made or allow for price adjustments to pay for any necessary repairs.

Termite Inspection
Lenders require the home to be free of termites, so be sure to get a termite inspection and have the seller pay for a treatment if any termites are found.  This is not required in all states.

What Goes with the House
Specify what furnishings -- such as curtains, rugs, chandelier, and so on -- are included in the sale.

Condition of House at Settlement
Specify what must be in demonstrable working order at the time of settlement, as verified during a walk-through of the premises a day or so before settlement.

Other Conditions
The list could go on, but every additional condition runs the risk of making your offer more complicated and less appealing.

Questions For A Home Inspector



What is Title Insurance?

What is Title Insurance?

First, the word “Title” is a collective term for all of your legal rights to own, use and dispose of land.  Title includes all previous ownership, uses and transfers. To legally transfer real estate property, a title search must be performed, and, in most cases, the title must be found free of any circumstances that could endanger your right of ownership.  Title insurance protect against the possibility of future loss should your legal rights to your property be challenged.

For a one-time premium paid during the closing process, your title insurer assumes responsibility for all legal expenses to defend the title to your property if ever challenged.  If the defense is unsuccessful, you are reimbursed for any reduction in the value of the land.  It is an important layer of security.

There are two types of Title Insurance: A lender’s policy and an owner’s policy.  The lender’s policy protects the lender’s interest in the property for the amount of the mortgage loan.  An owner’s policy protects the homebuyer for the full property value.


What Does An Owner’s Policy Cover?

An owner’s policy protects your interest in the property against such hidden hazards as:

Mistakes in the recording of legal documents
Forged deeds, releases or wills
Undisclosed or missing heirs, including spouses
Deeds by persons of unsound mind
Deeds by minors
Deeds executed under an invalid or expired power of attorney
Liens for unpaid taxes

What Is A Title Search?

A title search is a detailed examination of all available public records on a property to verify the seller’s right to transfer ownership, and to discover any potential challenges in the closing and ownership process.  A title search should reveal unpaid taxes, unsatisfied mortgages, judgments against the seller, and restrictions limiting the use of the land.  However, even the most diligent search may fail to reveal some hidden hazards, such as those mentioned above that Title Insurance protects from.

How Long Does Title Insurance Coverage Last?

A lender’s policy lasts until the mortgage is paid in full. An owner’s policy remains in force as long as you or your heirs have an interest in the property.  If challenges to title arise after the property has passed to your heirs, the title insurance company would defend the title for them just as it would for you.

What Is Escrow & How Does It Work?

 As a buyer or seller, you want to be certain all conditions of your sale have been met prior to property and money changing hands. The technical definition of an escrow is “a transaction where one party engages in the sale, transfer, or lease of real or personal property with another person who delivers a written instrument, money or other items of value to a neutral third person, called an escrow agent”. The escrow agent holds the money or items for disbursement upon the performance of a specified condition.

The escrow agent impartially carries out the written instructions given by the principals (buyer and seller).  This includes receiving funds and documents necessary to comply with those instructions, completing or obtaining required forms and handling final delivery of all items to the proper parties upon successfully completion of the escrow.
The escrow agent must be provided with the necessary information to close the transaction.  This may include loan documents, tax statements, fire and other insurance policies, terms of sale and any financing obtained by buyer, and requests for various services to be paid out of funds being held.

Your role on closing day

At closing, your participation will involve a couple of steps:

Sign legal documents

This falls into two categories: the agreement between you and your lender regarding the terms and conditions of the mortgage, and the agreement between you and the seller transferring ownership of the property. Be sure to read all documents carefully before signing them, and do not sign forms with blank lines or spaces.

Pay closing costs and escrow items 

There are numerous fees associated with getting a mortgage and transferring property ownership. Usually, the borrower pays these fees with a check at closing. Some fees can be added to the loan balance, or the borrower can pay a higher interest rate and have the lender pay the fees.

Closing documents

You will receive the following important documents:

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