Buyers' Frequently Asked Questions

Your buying power will usually be based on your income, your debts, and the size of the down payment you can make. When you first meet with a lender, they’ll ask you about each of these factors (among others) and begin the prequalification process. This is a great way to clarify your shopping budget and timeline, and to learn about any financial moves you need to make to prepare for loan application.

Want to get a generalized idea of your budget? Our online mortgage calculators are a great place to start.

The very best person to help assess specific financial projections of your home purchase is your local lender. But generically, there are a number of potential items to budget for when you first consider homeownership. Here are a few of the most common:

· Your down payment. This amount can vary widely depending on your loan type, your available savings, and the monthly payment you’d like to make. Talk to your lender to find out more. For more specifics, see the Financing FAQ below.
· Your closing costs. Often near 2-3% of the total purchase price, these fees can vary as well. Talk to your lender about how much you should be prepared to pay. They should be able to work up what’s referred to as a “Good Faith Estimate” for any property that interests you.
· An Earnest Money Deposit (EMD). Presented up-front when an offer is accepted, the EMD communicates seriousness to your seller. EMDs are not required, but they are recommended, and they can range anywhere from $500-2,000 or more (many times depending on the purchase price of the property). Talk to your MKB agent for more information and guidance.
· Appraisal: $500+. If you’re purchasing with a lender, they will usually require an appraisal and order it for you. If you’re purchasing in cash, this cost is optional, but may still be a good idea depending on your situation.
· Home warranty: $750+. A warranty isn’t required, but some buyers find it gives them additional peace of mind. Note that this type of warranty is different from homeowner’s insurance, as it usually warrants items like kitchen appliances, water heaters, HVAC systems, etc. In addition to the expenses listed above, don’t forget to plan for moving costs, utility transfers, and any important upgrades you’ll need to make after moving, along with the up-front cost of most inspections and surveys you opt to perform (see below). And of course, keep in mind that all the costs listed here are estimates.

When you first put an offer on a property, you may elect to perform various inspections and surveys to help assure that the property is in good working order. Talk to your MKB agent about the best types of inspections for the property that interests you. In general, however, here are some of the most common inspections you might consider, along with a loose estimate of their potential costs.
· Home inspection: Like most of your inspection costs, this is one you should prepare to pay up front (and it’s a great investment in your purchasing process!). You can expect an inspection to cost approximately $500, but many inspection companies offer additional options (like sewer-line inspections, pest inspections, etc.) that can add considerably to the total.
· Radon inspection: A radon inspection often costs $100-200 and is highly recommended.
· Other inspections: when entering into a purchase agreement, be sure to be upfront with your MKB agent about any elements or inspections that are of essential importance or concern to you. Also, ask your agent if there are any specific inspections that they would recommend for the property, such as a well and septic inspection.
· Survey: $500 and up, depending on the size of the property you’d like to purchase. While a survey is usually optional, it can help you understand exactly where your property lines are located – especially important if you’d like to build an addition or accessory building, install a fence or a pool, or purchase your own title insurance, for example.

Keep in mind that the cost estimates listed here are just that, and total expenses may vary widely.

In some cases, a buyer’s agent is paid from the seller’s proceeds at settlement. (In other words, your agent will be paid on closing day through the money the seller makes from the sale of their property.) However, that is never a guarantee. It’s important to read over your buyer’s agency agreement when you and your agent meet. This agreement outlines what you have negotiated and are committing to pay your REALTOR for their professional services. Don’t be afraid to inquire about specifics—MKB agents will be open and honest about any possible costs to you.

These days, there are a myriad of loan packages available, and your MKB agent can connect you to a local lender who will recommend the best one for your needs. Keep in mind that sometimes there are grant opportunities that certain municipalities will offer to homebuyers, such as a downpayment assistance grant—your local lender will know all about these and can recommend them based on your situation. That said, let’s talk through the pros and cons of the most common loan types: A conventional, 30-year fixed-rate mortgage (30-year FRM) can sometimes require a greater down payment than other loan types. On the upside, the monthly cost is usually lower than that of FHA and VA loans, for instance, and lenders are likely to make fewer stipulations about the type of house you can purchase. FHA, USDA, VA and similar federally-backed lending programs may require much lower down payments (and sometimes no down payment at all!), but the monthly costs are usually higher. These types of loans can also come with some requirements about the location, condition and type of homes you might consider. The bottom line is: your lender can talk you through the strengths and weaknesses of each loan type in greater detail, and they may even be able to recommend specialized loan programs you haven’t thought to consider.

A buyer’s agent is your trusted advisor and confidant in your home search. You’ll spend many hours looking at homes with them, so make sure you resonate with their personality and communication style.

Most importantly, the best agent is one who truly listens and makes you feel comfortable. As you share your goals, pay attention to how they respond (and what they remember later!). The right agent will develop a keen understanding of what’s important to you.

A good buyer’s agent is so much more than a door opener. This person can serve as an impromptu coach, data analyst, or design geek. Your MKB agent puts ethics, expertise, and education to work for you. Here are a few other services they will be versed in:
· In-depth local market knowledge.
· Strong negotiating skills.
· Knowledge and expertise with complex forms and contract provisions.
· An eye for the small details of the sale and a willingness to keep you on track.
· Connections to and recommendations for local service providers (e.g. lenders, inspectors, contractors).
· Constant protection of your interests and confidentiality before, during, and after a contract is signed or a deal is closed.
· A long-term commitment to helping you navigate life as a homeowner.

Short answer: The best time to buy a home is when you’re ready—and not just financially. Your MKB agent will take time to discuss your motivations for buying a home and will help weigh any questions or reservations you might have in order to find the best path forward for you. Keep in mind, too, that real estate markets change rapidly from year to year, and sometimes even from week to week. Talk to your MKB agent about the latest local market conditions, and about how those market conditions will affect your goals. In general, however, you can usually expect the greatest number of available homes during the spring and early summer. Fewer homes tend to enter the market in late autumn and winter, with the pace of the market often slowing slightly as a result.

Home inspections can sometimes feel overwhelming, especially for first-time buyers. Which repairs are actually necessary? Which are less important? Here’s the good news: you’re not alone! Your MKB agent is familiar with home-inspection do’s and don’ts and can help you weigh the different options available to you.

Possibly. But keep in mind that once an offer is accepted by the seller, it becomes a legally binding contract, with relatively few windows to exit the sale without expenses and stress. There are certain optional provisions that exist in purchase agreements that will govern the ability to change your mind—your MKB agent will be able to explain the exact scenarios in which these provisions can be added and exercised. That’s why it’s a great idea to sit down with your MKB agent before you ever make your first offer. Read through the contract, ask questions, and take notes. By the time you find a house you love, you’ll be able to confidently make an offer that protects your interests and aligns with your goals.

Your MKB agent is a local expert, so take advantage of that expertise! If you’re seriously considering a home, ask them to point out local schools, parks, greenways and rec centers, favorite spots to grab coffee or work out, and any special features you may not have considered. If time permits, walk around the neighborhood to get a feel for the community, and drive your potential home-to-work route to ensure the commute is realistic. When you find a home that might be “the one”, walk yourself through a day in your life in that home—does it feel natural? Does it excite you? Remember: when you purchase a home, you’re buying into an entire local lifestyle – a place where you’ll shop, dine, make friends and play – so make sure that lifestyle is a good fit for your tastes and goals.

We're happy to point you in the right direction! Give us a ring at (540) 989-4555 or drop us a line using our contact form.