Frequently Asked Questions

From Buyers

 

 

Q:  What is a Buyer’s Agent?  Should I have one?

 

A:  A Buyer’s Agent is an agent who exclusively represents the interests of the Buyer in a real estate transaction.  There is a written agreement between the buyer and the agent that creates obligations on the part of the agent to the buyer.  The buyer also agrees to use the agent exclusively as their sales representative during the term of the contract.  Buyers benefit greatly from a Buyer Agent relationship.  In Pennsylvania, as in most states, real estate agents are considered to be representatives of the seller unless they have a buyer agency agreement with an agent.  This means that in the absence of a buyer agent relationship a buyer does not have true representation in the sale.  Based on the complexity of the real estate transaction, it is important for buyers to have their own representatives dedicated to looking out for their interests exclusively.

 

Q:  How do I select a Buyer Agent?

 

A:  You should start by looking for qualities that you would expect in any business relationship (integrity, experience, responsiveness, competency, creativeness, etc.).  You should then look for a Realtor who knows the market that you are interested in and has experience in selling homes at your price level.  Finally, you want to select someone who will commit to spending whatever time is necessary with you to find the perfect home!

 

Q:  What should I expect from my Buyer’s Agent?

 

A:  You should expect your agent to conduct a thorough interview with you to gain an understanding of what it is you desire in your new home.  Bill and Nancy make a point of asking questions not only about what kind of home you wish to have but also what your personal needs are for commuting, shopping, public transportation, etc.  Your agent should also do much of the homework for you by sending you copies of listings that closely resemble your profile.  A good agent will make extensive use of the internet so that you spend more time gaining focus on exactly which houses you want to see before you even get into the car!  Your time is important and Bill and Nancy are determined to make the best use of it.  Your agent should be an expert negotiator so that your best interests are represented in the bargaining process.  Finally your agent should take care of all the transactional details for you so that the home buying process becomes as smooth and stress free as possible.

 

 

 

Q:  How much money do I need to buy a house?

 

A:  Unlike in years gone by, it is now possible to buy a house with a minimal down payment or with no down payment at all.  It all really depends on the creditworthiness of the individual, the income level of the buyer and the cost of the house.  For this reason, an important first step in the home buying process is to obtain a pre-approval letter from a reputable lender of your choosing.  This pre-approval process will allow you to gain an understanding of the mortgage products available to you, determine how much house you can afford, learn what your monthly payments will be, etc.  Once you have this knowledge you are better prepared to focus on your home search. 

 

Q:  How do I find a good lender?

 

A:  There are many good lenders available.  Prudential Patt, White has an affiliation with Priemier Mortgage that has a long tradition of providing excellent service, competitive rates and reasonable fees.  When interviewing lenders you want to know what their track record is in “closing their loans”.  You also want to know what the true cost of the loan is when factoring in all the various loan costs.  You can easily do this by asking any potential lender what the “APR” or Annual Percentage Rate is on the loan.  The lower the APR, the less expensive the loan is for you!  You should ask any potential lender for a “Truth in Lending” statement before applying for a loan.  This statement details all of your expense for the loan, illustrates the percentage rate and gives the APR.  Finally, it is often helpful to find a lender who has experience and knowledge of the local real estate marketplace.  For more information on how to select a lender, call Bill and Nancy Reynolds.

 

Q:  How do I make an offer on a house once I have found one that I like?

 

A:  Once you have found a home that you like, you must decide how much you want to offer and what terms and conditions you will ask for.  This is a critical step in the home buying process and this is one of the most valuable services professional Realtors like Bill and Nancy Reynolds provide.  Bill and Nancy start by conducting a comparable market analysis to see how the home you are interested in compares in price to others like it that have recently sold.  You will also want to know how long the subject property has been on the market and what the average amount of time on market is for all homes currently available.  Additionally, you want to make sure that you look diligently at the “Sellers Disclosure” which will disclose to you any known defects or hazardous conditions in the house of which the seller is aware.  Once you have all this information, you are ready to determine a price.  Bill and Nancy Reynolds will then discuss with you the need for a number of other important contract terms that you may wish to include such as home inspections, mortgage contingency, insurance contingency, etc.  Once you have your offer prepared on an “Agreement of Sale” (which Bill and Nancy will prepare for you) it is submitted to the Seller’s agent along with a deposit check (usually $1,000) for “Earnest Money”.  The Seller may then accept your offer, reject it or counter-offer.  For more information on the Agreement of Sale and the offering process, give Bill and Nancy a call.

 

Q:  How quickly can I settle on the house?

 

A:  While it is possible to settle on a home within a week or two, most settlements take place within 30 to 60 days from the date of contract execution.

 

Q:  Do I really need a home inspection?

 

A:  Bill and Nancy highly recommend that all buyers obtain a home inspection from a quality certified inspector of your choosing.  While we do not recommend particular inspectors, we can provide you with brochures of several who you can interview.  An inspection is important since it will point out to you hidden defects that may not be apparent to the buyer.  While most homes have some minor defects and should be expected, major system issues and structural problems need to be addressed.  A home inspection is also a good time to learn about your new home, how it operates and what you need to do to maintain it.

 

Q:  What about Home Warranties?

 

A:  Home Warranties provide insurance coverage on many of the systems in the house for a period of time (usually one year).  Many times Sellers will include a Home Warranty as an enticement to purchase.  Sometimes Buyers purchase these plans on their own.

 

Q:  How much will my closing costs be?

 

A:  Closing costs are dependent upon the value of the house being purchased, the type of mortgage selected, the location of the house (taxes), etc.  There really isn’t any “average” cost, as all of these circumstances are unique.  Bill and Nancy can help you understand what these costs are likely to be by providing a Buyer’s Closing Costs Estimate before you actually sign an Agreement of Sale and make an offer.

 

Q:  What is Title Insurance?  Do I need it?  How much does it cost?

 

A:  Title insurance protects your lender (and you also if you have an “Owners Policy”) for claims against the property due to defects in the title.  Your lender requires title insurance.  While an owner’s policy is optional it is highly recommended for everybody.  The cost for Title Insurance is based on the value of the property.  The higher the value, the higher the premium will be.  Title Insurance rates are set by the state so all Title Insurance companies charge the same.  Title Insurance premiums are paid once at Settlement and the coverage is good for as long as you own your home!