Buyer's Guide
You’ve Got Questions - I’ve Got Answers
Don't miss out on your opportunity to own your home. Owning your own home has many benefits. When you pay rent, you don't have to worry about maintenance. But as a renter you are missing out on the opportunity to build up equity, and wealth.
Everyone deserves to own the home of their dreams, and you can be next. Interested to learn a bit more? Contact me to get started.
HOW DO I KNOW IF I AM READY TO BUY A HOME?
You are ready to buy a home when you have a reliable job (2-3 years) with a good history of paying your bills. Less than stellar credit will NOT stop you from owning a home. While it is easier to buy a home with a large down payment, there are many first time home lenders with programs to help you with a small down payment or even no down payment. I have helped VA buyers get their first new home without any down payment.
With access to lenders I am happy to help you find the right lender to help you achieve your dream of home ownership, and I am happy to go over all your options to help you buy your home.
HOW DOES A LENDER DECIDE THE AMOUNT OF HOME I CAN PURCHASE?
The lender considers your debt-to income ratio. This means that they compare your gross monthly income to your monthly housing expenses. Your lender wants to see your ratio at no more than 29% to 30% debt to income. Another ratio they consider is your non-housing related monthly expenses to your monthly income. This includes things such as student loans, car loans, and credit card debts to your income. A lender wants to see this ratio at no more than 41%. When determining the most amount you can afford to borrow, a lender also looks at other factors, such as cash available for your down payment, closing costs, and your credit history. Having less than stellar credit will NOT prevent you from being able to buy a home.
WOULD I BE BETTER OFF RENTING?
Renting vs buying is a personal choice. Most people who rent do so because they are concerned about maintenance, or they don't believe they can own because of the amount of their deposit, or they are concerned about their credit score. Owning a home has many benefits, including building equity and wealth. You will never build wealth renting. But renting does give you more flexibility and freedom to move far away if necessary. The stability and security of home ownership from rising rents can make owning a home worth it. If you are worried about maintenance costs, purchase a home warranty and renew it annually. This will save you from making large repairs at a time. You don't want to avoid maintenance because that just brings problems down the road, and lowers your house value.
HOW DO I NARROW DOWN MY HOUSING NEEDS TO MY DESIRES?
When you buy a home, you should consider how you currently live, and what conveniences you are looking for. Should your home be close to public transportation? Do schools matter to you? Think about the space you need. And consider how you want the space to be. Are you older, and in need of a one level home? Do you like your freedom without being tied to mowing your lawn? What kind of amenities are you looking for? If you really want a brick fireplace, then put that on your wish list. But, you should have a minimum requirements list, and then a wish list. You may not get your absolute dream home the first time around, as it all depends on location, size, and budget. But, that doesn't mean you won't find a very nice home that suits you well and that can make you happy.
I AM READY TO BUY. HOW DO I PAY YOU?
As a buyer's agent, I represent YOU throughout the process. I am legally, ethically, and professionally bound to protect your rights in the purchase of your new home. The best part is, even though I protect you, I am paid through the seller as a split commission. So, you don't need to worry about how to pay me. You should have a buyer's agent protecting your rights through the home buying process. So put your mind at ease and let me handle your buying needs.
WHY SHOULD I BE PRE-APPROVED WITH A LENDER BEFORE I LOOK AT HOMES?
A pre-approved letter is part of the buyer's offer on a home. Having this letter ensures that the seller will take your offer seriously. This is an important factor if there are multiple offers. Besides, before you go looking at homes, knowing what loans are available to you, as well as how much you can afford, allows you to focus on finding the best home for your money.
HOW MANY HOMES SHOULD I LOOK AT BEFORE I MAKE A DECISION?
There isn't a definitive answer to this question. Each home should be seen for its individual characteristics. When you created your minimum requirement checklist, you should compare the features of the home you are looking for to the list. Also, consider whether this home you are looking at has enough room for expanding in the future. Are there enough bedrooms and bathrooms? Is the yard big enough? Do you like the floor plan? Are the appliances modern and updated, or old and outdated? Can you live with having to under go renovations? On average, most home owners look at 15 homes before deciding to purchase. It's important for you to communicate as much information as possible to me as you can think of so when we view properties I have narrowed your choices down to the best alternatives.
WHAT IS A BUYER'S REAL ESTATE AGENT?
If you call a real estate agent who has a house listed for sale, that agent works for the seller. The seller pays his or her commission. So that agent will give you information, and may even sell you the house, but legally they represent the seller. Wouldn't it be better to have someone protecting YOU legally when buying your home? That's what a buyer's agent does. Although a buyer's agent still gets paid by the seller through a commission split, the buyer's agent only, legally, and ethically represents you, the buyer.
WHAT IS EARNEST MONEY?
Earnest money is a deposit you put down when you make an offer to buy a house. Earnest money shows the seriousness of your offer, and if your offer is accepted, it becomes part of the downpayment or closing costs. If your offer is rejected, your earnest deposit is returned back to you. The earnest money is held in an escrow account by me.
DO I REALLY NEED TO GET A HOME INSPECTION?
A home inspection focuses on the major structures of the home you are considering buying. An inspector will come out to your house and look for important structural damage to the foundation, mechanical systems such as air conditioning and heating, appliances, and plumbing. A home inspector will look at the condition of your floors, roof, ceilings, windows, ventilation, and your electrical system. A home inspector does NOT evaluate whether you are getting good value for your money. What a home inspector does is protect you if there are serious problems with the house you are buying, such as mold or serious foundation issues that was hidden from our view. Think of a home inspection as a protection of your purchase. When you make an offer on a house, you can make it contingent on a home inspection. This means that any repairs that need to be done can be negotiated between you and the seller. If you cannot come to agreement you can legally walk away from the property and get your earnest money back.
SHOULD I GET A HOME OWNER'S WARRANTY?
A home owner's warranty gives you piece of mind for the first year when you buy your home. If you are squeezing every dollar you have to buy your home, I recommend a home warranty to protect you against major issues, such as appliances, heating and air conditioning, or electrical
HOW IS LINDA PELTON DIFFERENT?
Because I have over 20 years in the real estate business managing title companies, I have handled complex commercial and residential legal transactions. I've even had lawyers call me for legal advice! My expertise is vast and there's not much I haven't done when it comes to real estate. You need a seasoned professional to make sure all your real estate issues are resolved, and that you are protected.
If I hope that my FAQ for the home buyer has given you a sense of what's involved in the home buying process. If you have any additional questions, please give me a call or email me. I am happy to go over your concerns.
Contact Linda Pelton For More Answers