As a real estate agent, it is my job to make sure all of your questions are answered, no matter how crazy you think they may be. This is to be expected, especially with first-time home buyers. There are many steps in the home buying process, and with each step comes new questions, so do not be afraid to ask! Buying a home may seem intimidating, but having an experienced realtor will make it much easier. With that said, I want to share three of the most commonly asked questions I get from home buyers, and how I would answer them for my clients.
Question #1: What is the First Step?
I always tell first-time home buyers we need to figure out what their “buying power is”. How much they are approved for might not be what they want to pay for each month. A loan officer will pull their credit, and look at their income and their current debt, to determine how much they can afford. Buyers might be approved to spend $1M on a house but only want to pay a $1500/mth mortgage. So what do they do in this case? The agent, buyers, and lender should work together to come up with a good/comfortable plan for a buyer. Just because you get approved for a large amount, does not always mean you need to take it all. Figure out how much you will be comfortable paying each month and go from there.
On the other hand, a buyer may be approved for $300,000 but was looking at houses that were $400,000. Figuring out your buying power before looking for homes will avoid getting hopes up for a home that isn’t in the budget. Your agent should know your buying power before helping you look for homes.
Question #2: How Much Should We Offer?
This depends on a lot of different factors. One factor is competition; is the house priced low or too high compared to the competition, the other being if the listing agent is calling for “highest and best.”
If there are 400 people at an open house in a desirable town with only 4 houses on the market, competition will be fierce! If the house seems priced too low, the listing agent may be hoping for a bidding war. If the house seems too high, the sellers may want to get as much money as they can.
If there is an offer deadline and the listing agent is asking for “highest and best” you get 1 shot to put an offer in. Don’t expect anyone to come back to you with a counteroffer. Your agent will help you determine what YOUR best offer is; that doesn’t always mean the highest amount of money either.
Question #3: What Happens if I Need to Sell a House in Order to Buy a New One?
There are a lot of options for this! A good agent will not let you be homeless!
- Have your house READY TO LIST THE DAY YOU PUT AN OFFER IN. This means, paperwork signed, photos taken and open house penciled in! A listing agent won’t give much weight to an offer subject to selling a house that isn’t even on the market yet.
- List your house “subject to seller finding suitable housing.” This means a buyer is willing to wait for you to find your new house to close. You can continue to live in your house while you are looking. There is usually a deadline for how long a buyer will give you to continue looking.
- Agree to a “rent back” from the new buyers. This means the new buyers close on your house but you can keep living in it for a certain amount of time. You agree to make payments to the new owners each month usually for the amount of their new mortgage payment until you can move into your new house.
Buying a new home can be overwhelming and exciting. To ease the stress, make sure you have a trustworthy and reliable real estate agent by your side. It is our job to answer any and all of your questions and concerns you may have. So do not be afraid to ask questions, you want to make the best decision and your realtor wants the same. If you haven’t found a New England realtor yet, contact me today. Homes With Holly would love to answer your questions and help you find your slice of hometown luxury!
