Frequently Asked Questions
FREQUENTLY ASKED REAL ESTATE QUESTIONS
Q: What the first step of the home buying process?
A: Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender get the ball rolling in the right direction because you’ll need to know how much you can borrow. Knowing how much home you can afford narrows down online home searching to suitable properties, thus no time is wasted considering homes that are not within your budget.
Q: How long does it take to buy a home?
A: From start (searching online) to finish (closing escrow), buying a home 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).
Market conditions also play a huge role in how fast homes close. In a hot market, transactions can take a bit longer due to parties getting more behind with the activity of multiple sales. If each party takes a day or two longer to get their work done, the whole process gets extended.
Q: What is a sellers’ market? What is a buyers’ market?
A: In a sellers’ markets, increasing demand for homes drives up prices. This can be driven by economic factors, low interest rates and low inventory.
A buyers’ market is characterized by declining home prices and reduced demands. Higher interest rates, high inventory and natural disasters can cause a buyers’ market.
Q: How much do I have to pay and agent to help me buy a house?
A: Little to nothing. Agents who represent buyers (a.k.a. buyer’s agent) are compensated by the listing broker for bringing home buyers to the table. When the home is sold, the listing broker splits the listing fee with the buyer’s agent. Thus, buyers don’t pay their agents.
Q: What kind of credit score is needed to buy a home?
A: Most loans require a FICO score of 620 or better. Typically, the higher the credit score, the lower the down payment and the better the interest rates. Borrowers with a credit score of 740 and above tend to see greater benefits.
Q: How much money is needed for a down payment?
A: The down payment average is 11%, but there are benefits for first time homebuyers, who usually only need put down 3 to 5% on a home. VA loans and USDA loans can be made with zero down.