•  ​What is the first step in the home buying process? ​Getting pre-approved for a mortgage is the first step in the home buying process. This involves getting a pre-approval letter from a lender, which will help identify how much you can borrow. Knowing your budget will help you avoid wasting time looking at properties that are not within your means. Additionally, the loan estimate from your lender will show how much money is required for the down payment and closing costs. This will give you a clear picture of what is financially required. 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. Most real estate agents will require a pre-approval before showing homes.

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• How long does it take to buy a home? The home buying process typically takes around 10 to 12 weeks from start to finish. 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. However, home buyers who pay cash and are well-prepared have been known to purchase properties faster than that. Market conditions can impact the speed of the process. In hot markets with a lot of sales activity, buying a home may take a little longer than normal due to increased demand for property appraisals and home inspections, which can slow down the process.

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• What is a seller's market? A seller's market is characterized by increasing demand for homes, which drives up prices. Several factors can drive demand, including economic factors, interest rates trending downward, a short-term spike in interest rates, and low inventory due to a lack of new construction. In a seller's market, sellers have the upper hand because there are more buyers than there are homes available, which can lead to bidding wars.

 

• What is a buyer's market? A buyer's market is characterized by declining home prices and reduced demand. Several factors can affect long-term and short-term buyer demand, including economic disruption, interest rates trending higher, short-term drops in interest rates, high inventory, and natural disasters.

 

• What is a stratified market? A stratified market occurs when supply and demand characteristics differ by price point in the same area. For example, a high-end neighborhood may have more demand than supply, while a lower-end neighborhood may have more supply than demand.

 

 

• How much do I have to pay an agent to help me buy a house? Buyers don't typically pay any fees to their agents when purchasing a home. This is because there are usually two real estate agents involved in the sale: one representing the seller, and another representing the buyer. The listing broker charges the seller a fee to represent them and market the property, but when the property is sold, the listing broker splits the fee with the buyer's agent.

 

• What kind of credit score do I need to buy a home? Most loan programs require a FICO score of 620 or higher. Borrowers with higher credit scores are considered less risky to lenders, which often results in lower down payment requirements and better interest rates. Conversely, homebuyers with lower credit scores may need to put more money down or accept a higher interest rate to offset the lender's risk.

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• How much do I need for a down payment? The national average for down payments is 11%, but this includes both first-time and repeat buyers. First-time homebuyers usually only put down 3 to 5% on a home because many first-time homebuyer programs don't require larger down payments. For example, an FHA loan only requires a down payment of 3.5%. Some programs, like VA loans and USDA loans, can be made with zero down, but these programs are more restrictive.

 

• Should I sell my current home before buying a new one? If you plan to use the built-up equity in your current home as a down payment on the new one, you will need to sell your current home first. However, if you plan to turn your current home into an investment property and rent it out, you may not need to sell it. In this case, your loan advisor will still need to evaluate your risk profile and credit history to determine if making a loan on a new home while retaining the title to the old home is feasible.

 

• How many homes should I view before buying one? The number of homes you should view is ultimately up to you. Thanks to the internet, home shopping today is easier than ever. You can browse and view pictures of homes online before ever leaving your living room. However, visiting a home in person is still the best way to see how it looks and feels.

 

• What is earnest money? When you make an offer on a home, your agent will ask for a check to accompany it. This deposit is typically 1% to 2% of the purchase price and is referred to as earnest money. It is made in good faith to demonstrate to the seller that your offer is genuine. If your offer is accepted, the earnest money is applied to the down payment and closing costs. If the deal falls through, the money is returned to you. However, if you back out of the deal, the earnest money may not be returned to you.

 

• How long can the seller take to respond to my offer? Your written offer should stipulate the timeframe in which the seller should respond. 24 hours is typically sufficient.

 

• What if my offer is rejected? Sellers have the option to accept or reject an initial offer. However, a third common option is for sellers to make a counteroffer. Remember, a deal isn't dead until it's dead. If the seller makes a counteroffer, you're still in the game.

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• Is it necessary to order a home inspection? Yes, it is! If you plan to finance your home with an FHA or VA loan, home inspections are required. Even if you don't require mortgage programs, it's highly recommended to get a home inspection done. It can reveal defects in the home that are not easily detected, and it brings peace of mind to one of the biggest investments of a lifetime.

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• Do I need to do a final walk-through? It's not mandatory, but it's a really good idea! A final walk-through gives the buyers a chance to make sure that 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.