How far in advance should I begin my home search?
Our real estate team is certainly willing to meet with a potential client months in advance of their home purchase. We like to help you lay out a plan for buying a home. Generally though, you don’t want to start pre-viewing homes in person until you are ready to actually write an offer. Too many buyers think they need to start looking at homes months before they’re ready to buy. They’ll say, “Well we don’t know what we want” or “Can we just look at a few homes to get a feel for what’s out there?” What ends up happening though is they fall in love with a home and they’re not ready to buy, or they get fixated on that specific home and want to break their apartment lease. In both cases, it’s an emotional and financial mistake. That’s why I don’t go shopping for a new car before I’m ready to buy. I know I’ll see a beautiful new car with that new car smell and I’m hooked.
Should I get pre-approved for a home loan first?
Yes! and I cannot emphasize this enough. Many buyers want to begin looking at homes without a lenders pre-approval letter in hand. How would you know how much home you can afford and what all the associated costs are if you don’t talk to a lender first? Also, even if you find your dream home, the seller will demand to see a pre-approval letter with your signed offer. Otherwise, they won’t take you serious. Ask your Realtor to recommend a great lender. Trust me, all lenders are not created equal and it’s not about who will give you the lowest rate either.
How much money will I need to put down?
This depends on what loans you qualify for. Veterans can qualify for 100% financing through the Veteran’s Administration (VA loan). Not all lenders handle VA loans so be sure to ask. FHA loans allow you to only put down 3.5% of the total home price, while conventional loans range from 5% down to 50% down. Keep in mind there are additional costs associated with the loan. For example, a typical FHA loan for a $200,000 home may have loan costs of $3,000 to $4,500
I can find homes for sale on the internet. Why do I need a buyers agent?
Yes, it’s true that you can find many homes for sale on the internet. Unfortunately, many of the very best homes are already sold before you see them online. Websites like Zillow, Trulia, and Realtor.com have a “feed delay” that causes them to sometimes show up 24-48 hours after they go live on the MLS (Multiple Listing Service). Other times the information on these websites is just plain wrong (like Zillow’s “zestimate”) or they don’t even show up at all. All these consumer websites feed directly from MLS so that means Realtors have the information first and can get you into the house quickly before hundreds of other consumers see it online.
How exactly does a buyers agent help me?
Most of our clients do see their dream home online first. If that’s all there was to it, then you probably wouldn’t need a buyer’s agent. In reality, finding the home is the easy part. A great buyer’s agent can route you to the very best lender (yes there is a huge difference), consult with you about specific schools or areas that fit your needs, save you time by not looking at the wrong homes, make suggests about what homes are the best value, even possibly find you a great deal. And that’s only the beginning. From there, the agent should be able to help you determine a good offer price, handle all the negotiations on your behalf, suggest an experienced home inspector, discuss the details of the home inspection with you and negotiate repairs with the sellers agent. They should even help you through the appraisal, closing, and moving process. There are many, many more specifics involved in making sure your home purchase is a very smooth transaction for you and your family. Trust me, a great buyer’s agent earns every penny!
Don’t agents get paid a base salary from their broker?
This is a very common misconception but couldn’t be further from the truth. Agents do not get paid any base salary. They work on commission and they don’t get paid until someone buys a home and closes the deal. That’s why it’s so tough to make a living in real estate. A new agent can sometimes go three to five months before receiving their first paycheck.
How does a buyer’s agent get paid?
When a seller signs a contract with a “listing agent” to help them sell their home, part of that contract includes compensation for the broker(s). Let’s say the listing contract states that the seller will pay 6% commission to the broker on the sale of their home. To entice all the other Realtors to show this home to their buyers, the listing agent agrees to offer 3% of that commission to any agent that shows, and ultimately writes an offer. So, when your buyer’s agent helps you purchase the home, that 6% total commission is split between the listing agent and your buyer’s agent (your agent gets 3% of the sales price). Your agent gets compensated through the transaction but only represents you and best of all, you don’t have to pay them out of your own pocket.
Couldn’t I get a better deal on the price without a buyers agent?
The short answer is “no”. Some inexperienced buyers may think this, but it’s simply not true. When a seller signs the “listing contract” they are agreeing to pay a 6% commission. Whether there is only one agent (listing agent) or two agents involved (listing agent and buyers agent) in the transaction, the seller has agreed to pay a total commission of 6%. Without a buyers agent on your side, the listing agent keeps the whole 6% commission and you get the opportunity to be completely unrepresented throughout the entire transaction.
If my buyer’s agent is paid on the total sales price, wouldn’t they have more incentive to want me to pay more for the home?
Let’s look at this for a moment. If you pay $5000 more for a home, your buyer’s agent will make an extra $150. I don’t know about you, but I’m not going to risk losing the trust of my client over $150! Choose your Buyer’s Agent wisely and this will never be a concern. A great buyers agent understands their clients have the potential to refer all their friends and family to them when they’re ready to buy a home. They’d rather negotiate hard to win their buyers trust and get thousands of dollars in business in the future, than collect another $150 right now.
Will my buyer’s agent be able to show me any homes that are on the market, or just the ones his office has for sale?
It doesn’t matter whether the home is for sale with Keller Williams Realty, Remax, Reece Nichols, or anyone else. Your agent can show you any home that’s for sale, including For-Sale-By-Owner homes and bank repos (REO’s) too.
Should I look at foreclosures? I’ve heard they can be a good deal.
Everyone always wants a good deal, but a good deal typically comes with a lot more work than you think. We are more than happy to show you foreclosures, but we rarely find them to be a good deal. We suggest you leave the foreclosures to someone like an investor that has a lot of time and cash on hand. You should also know foreclosures are “bank owned” so they typically don’t have any knowledge about the home and are sold “as is.”
How many homes should we look at before writing an offer?
That’s totally up to you. Some of our clients buy the first home they see in person. They’ve looked at so many homes online, they know exactly what they want. There’s nothing wrong with making a decisive move on the home you love, even if you’ve only looked at one or two homes in person. We also have some clients that feel they need to view 10-15 homes in person before making a decision and there’s nothing wrong with that either. Our average client looks at hundreds of homes online, then narrows their search by driving by their favorites, so by the time we schedule a time to preview them in person, they only need to see their top favorites (usually 8 on average). We will definitely be able to help you with this too. We don’t want to waste your valuable time looking at the wrong homes. We only want to show you the very best homes that fit your needs.
How will we know what price to offer?
Your agent can help you with this but here’s some things to think about. Talk to your agent about what type of market you’re in right now. If this is a strong buyers market (like in 2008-2012) then everything’s negotiable. In a strong sellers market (2016-2017) then the seller is holding most of the cards because there is a shortage of available inventory. If you don’t want to offer the sellers asking price (or very close) then the sellers have no problem finding another buyer that will. Now, having said that, there are many other factors like “days on market”, condition of the home, repairs that need to be made, upgrades the house has, etc that will determine the value of the home to a buyer.
How long does it take to write an offer and how long does it take for the seller to accept our offer?
It really only takes about 30-45 minutes to put an offer together and go through everything with the buyers. Once the offer is submitted to the sellers agent, we will typically hear something within 24 hours. It may also depend on how strong the offer is and whether the sellers are entertaining other offers at the same time. The sellers may choose to give you a “counter offer” so sometimes it takes a little time going back and forth. Your agent will keep you in the loop throughout the entire negotiations process.
What closing date should I put on the contract?
Again, your agent can help you with this. From the time you write the offer, you’ll need to allow for at least 30 days to complete the home inspections, appraisals, final loan approval, and closing. Most closings happen 30 to 60 days from the time the contract is excepted. The exceptions to this are short sales and new construction homes which can take much longer.
What kind of home inspections should I do and who do a call to set that up?
Typically, most Missouri and Kansas home buyers will do a whole home inspection, termite inspection, and a radon inspection (around $525-$600). There are a host of other specific inspections that can be done as well if the buyer has concerns including, but not limited to: septic inspection, structural engineers inspection, electrical, roof, heating and cooling, health and/or environmental concerns (lead based paint, mold, asbestos). Your agent can make suggests for all home inspections and recommend a great company to do the work. The job typically takes about 3 hours and you’ll receive a very detailed report within 24 hours.
What are my options after doing inspections? Can I back out of the contract?
Upon completion of all home inspections, the buyer has three options. 1) They can accept the property as is without asking for any repairs. 2) They can cancel the contract, get their earnest money back, and walk away with no repercussions. Typically when they find major issues. 3) They can negotiate repairs to be done by the seller or ask the seller to reduce the price in lieu of repairs. Your agent can certainly make suggestions based on his or her experience.
Who does the appraisal and how does that work?
Your lender is the one concerned about whether the home is worth the price on the contract, so they order an appraisal and set that up. A home appraisal protects the bank from getting stuck with a property that’s worth less than they’ve invested, should the buyer stop making their monthly payments.
How do we schedule the closing and what do I need to know?
Your agent can schedule the closing time for you. Our real estate team schedules our buyers closings in our office to make it convenient for them. Our closing agent from the title company will bring all the necessary documents and go through them with you together, explaining everything as you go.