Real Estate Buyer's FAQ

Knowledge is said to open doors.  This is replica omega literally true when it comes to buying a home.  As a homebuyer, JC Jones CENTURY 21 American Dream can help you know where and how to begin the homebuying process.  The following questions and answers will give you a rolex uk foundation of basic knowledge. 


WHAT SHOULD I LOOK FOR WHEN WALKING THROUGH A HOME?


In addition to comparing the home to replica rolex watches your minimum requirement and wish lists, use the HUD Home Scorecard and consider the following:

  • Is there enough room for both the present and the future?
  • Are there enough bedrooms and bathrooms?
  • Is the house structurally sound?
  • Do the mechanical systems and appliances work?
  • Is the yard big enough?
  • Do you like the floor plan?
  • Will your furniture fit in the space? Is there enough storage space?  (Bring a tape measure to better answer these questions.)
  • Does anything need to repaired or replaced? Will the seller repair or replace the items?
  • Imagine the house in good weather and bad, and in each season.  Will you be happy with it year-round?

Take your time and think carefully about each house you see.  As your real estate agent, we can point out the pros and cons of each home from a professional standpoint. 

WHAT QUESTIONS SHOULD I ASK WHEN LOOKING AT HOMES?

question mark
Many of your questions should focus on potential problems and maintenance issues.  Does anything need to be replaced?  What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)?  Also ask about the house and neighborhood, focusing on quality of life issues.  Be sure the seller's or real estate agent's answers are clear and complete.  Ask questions until you understand all of the information they've given.  Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive.  The HUD Home Scorecard can help you develop your question list.

IS THE HOME LOCATED IN A FLOOD PLAIN?


Your real estate agent or lender can help you answer this question.  If you live in a flood plain, the lender will require that you have flood insurance before lending any money to you.  But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home.  Work with an insurance agent to construct a policy that fits your needs.

WHAT IS EARNEST MONEY?  HOW MUCH SHOULD I SET ASIDE?


Earnest money is money put down to demonstrate your seriousness about buying a home.  It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions).  If your offer is accepted, the earnest money becomes part of your down payment or closing costs.  If the offer is rejected, your money is returned to you.  If you back out of a deal, you may forfeit the entire amount.

WHAT IS AN ESCROW ACCOUNT?  DO I NEED ONE?

escrow process
Established by your lender, an escrow account is a place to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner's insurance, mortgage insurance (if applicable), and property taxes.  Escrow accounts are a good idea because they assure money will always be available for these payments.  If you use an escrow account to pay property tax or homeowner's insurance, make sure you are not penalized for late payments since it is the lender's responsibility to make those payments.

WHAT HAPPENS AFTER I'VE APPLIED FOR MY LOAN?


lender between 1-6 weeks to complete the evaluation of your application.  Its not unusual for the lender to ask for more information once the application has been submitted.  The sooner you can provide the information, the faster your application will be processed.  Once all the information has been verified the lender will call you to let you know the outcome of your application.  If the loan is approved, a closing date is set up and the lender will review the closing with you.  And after closing, you'll be able to move into your new home.

WHAT SHOULD I LOOK OUT FOR DURING THE FINAL WALK-THROUGH?


This will likely be the first opportunity to examine the house without furniture, giving you a clear view of everything.  Check the walls and ceilings carefully, as well as any work the seller agreed to do in response to the inspection.  Any problems discovered previously that you find uncorrected should be brought up prior to closing.  It is the seller's responsibility to fix them.

WHAT MAKES UP CLOSING COST?

closing cost
There may be closing cost customary or unique to a certain locality, but closing cost are usually made up of the following:

  • Attorney's or escrow fees (Yours and your lender's if applicable)
  • Property taxes (to cover tax period to date)
  • Interest (paid from date of closing to 30 days before first monthly payment)
  • Loan Origination fee (covers lenders administrative cost)
  • Recording fees
  • Survey fee
  • First premium of mortgage Insurance (if applicable)
  • Title Insurance (yours and lender's)
  • Loan discount points
  • First payment to escrow account for future real estate taxes and insurance
  • Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)
  • Any documentation preparation fees

WHAT CAN I EXPECT TO HAPPEN ON CLOSING DAY?


You'll present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid.  The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable).  The seller will provide proofs of any inspection, warranties, etc.

Once you're sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses.  You'll also sign a mortgage note, promising to repay the loan.  The seller will give you the title to the house in the form of a signed deed.

You'll pay the lender's agent all closing costs and, in turn,he or she will provide you with a settlement statement of all the items for which you have paid.  The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner.

WHAT DO I GET AT CLOSING?


  • Settlement Statement, HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing)
  • Truth-in-Lending Statement
  • Mortgage Note
  • Mortgage or Deed of Trust
  • Binding Sales Contract (prepared by the seller; your lawyer should review it)
  • Keys to your new home