Check out our Home Buyer Guide!
Buying a home is an exciting time in one's life. Making the smart move of choosing a REALTOR® is your first step to ensuring that your new home and community meets your needs. Our services and experience range from financial aid to helping you find the home that best suits you and your family. For your convenience, we also provide listings by email. We pride ourselves on repeat business and hope you'll come to understand why.
EXIT Central Realty Guide to Buying a Home…
The first question that everyone wants to know to know is how much is going to cost me?
To understand the upfront cost and when those fees are due, you have to understand when those are due, and the process that creates those fees. Here is the “cliff notes” version of that process!
Shopping for a home begins with the Buyers deciding what it is that they want to buy. The Buyer may work with a Realtor to do this, and that Realtor could be their agent or their Buyer’s Agent. (See CIS handout and Buyer’s Agency Agreement sample). There are no fees that are due to work with a Realtor to find and show these homes to you. Commission is typically paid by the Seller, not the Buyer.
Before the Buyer starts shopping, and definitely prior to writing a contract on a home, the Buyer must be pre-qualified. This lets the Buyer and Realtor know what price range the Buyer is qualified is for, and also what price range the Buyer has a comfort level with the monthly payments. Some lenders require you to pay an application fee upfront which can range from $300-$400. Being pre-qualified is critical with the new Statewide Contract (See sample contract) because Buyers cannot change the financing after a contract is signed without the Seller’s approval! If the Buyer changes the financing without the Seller’s consent, they are in default and could lose their deposit!
When the Buyer finds a home that they want, they must put a deposit on the home, which the Listing Brokerage holds. This deposit is known as an escrow deposit, earnest money, or good faith deposit. This typically ranges from $500 - $2000, but your Buyer’s Agent will educate you on what the best deposit would be to put down depending on the price range and other terms of the contract. This deposit (whether in check, money order, cashier’s check) is put in a non-interest bearing account after the contract is ratified by both the Seller and Buyer.
Within the contract, the Buyer and Seller will mutually agree upon an acceptable amount of time for the home inspection and negotiating time period of the inspection results. Most home inspectors require that their fee is paid is upfront at the time of the home inspection. This fee typically ranges from $300-$425. Some inspectors charge based on square footage of the home.
The next part of the Statewide Contract in regards to the inspections, are the other systems within the property that are not covered in the home inspection. This includes well water, septic (pump and certification), radon, swimming pools, and termite inspections. These are now ALL BUYERS fees. Some inspections can be paid at the time settlement, others need to be paid at the time of service. Make sure to find out from your Buyer’s Agent so that you can prepare. Buyers can choose what inspections they want, but some are mandatory based on the type of financing. That is another reason to make that you are pre-qualified before you find a home, because the good faith estimate from the lender will give a breakdown of expected fees and also what inspections are mandatory. Well and septic tests are not required for public water and sewer. Surveys are another expense to the Buyer and this ranges from about $375-$450. They are typically fees that can be paid at settlement.
Although this sounds as if the Buyer has a lot of upfront costs, remember that they are financing programs out there that you may qualify for to help cover some of the fees. There is also the benefit of the Buyer choosing a licensed inspector for each type of their choice, rather than being at the mercy of the Seller and their preference of inspector. That way the Buyer knows that the inspector is working for them.
Another important point to remember is that “Time is of the Essence” in the new Statewide contract. This phrase simply means that if the time frames agreed upon in the contract (such as application date, home inspection date, etc) are not met, there can be consequences as severe as the one party making the contract null and void. For each scenario, there are guidelines in the contract that explain when something is due, what happens if the date is not met, and how each party can take action. Make sure that you stay in communication with your Realtor to ensure that you are meeting all of your commitments in the contract.
The only thing that is not time is of the essence in the new contract, is the final settlement date. This can only be delayed is the survey is not complete, if the lawyer needs more time for the legal documents, or the mortgage company needs more time to prepare the settlement documents. This is not intended for Buyers who do not get their paperwork in time, but more for the additional approvals that may be needed, such as the DSHA approval. Settlement is held at the Buyer’s attorney’s office, and typically needs to be in the county of which the property the Buyer is closing in is located.
That is an outline of the some upfront fees and the general process of Buying a home! We at EXIT Central Realty, wish you the best of luck in your endeavor! Please contact us if you have any questions or know someone who does. We give our clients two key elements: education….and time. The education is provided through seminars, website information, office contacts and personal in-home service from our agents.
EXIT Central Realty will give you time to learn the market, study your options, and then make the appropriate strategic financial and real estate move. Additionally, we save you time by giving you a comprehensive and concise jump-start to your real estate shopping and selling experience.
We are not salespeople….we are educators.
We are in NO HURRY……our commitment to our customers’ 100% satisfaction requires that we provide the time and space to insure your experience is successful.