Buying Your First Home (FAQ)
Listed below are some questions that buyers frequently ask us:
Q. How many homes should I plan to view and how should I make the final decision?
A. Generally you should view a number of homes so you can become familiar with what you can expect to get for your money, When you find a home you really like, it’s a good idea to go back and look at it at a different time of day. This will give you greater insight into what it will be like living in the home full time
Q. How can I be sure it’s a good time of day?
A Since homes traditionally appreciate over time, whenever you can afford a first home – or a home that meets your needs better than the one you’re in – it’s a good time of day for you to buy. Often, home prices rise when interest rates decline and vice versa, so the best time to be a buyer occurs when rates are at or near their historical low at the same time that a larger supply of homes for sale is working to keep prices more negotiable.
Q. Why should I consider paying points?
A. Buyers often choose to pay a one-time charge called mortgage “points” in exchange for a lower interest rate. Usually paid at closing, each “point” costs 1% of the mortgage amount, or $2,000 on a $200,000 loan. The lower rate reduces the monthly mortgage payment, and points paid in conjunction with the purchase of a home are generally tax-deductible in the year they’re paid (see a tax advisor). Monthly savings will often exceed what was paid in points in just a few years’ time.
Q. What is the purpose of an attorney review?
A. In states where the real estate agent writes the contract, there may be an attorney review period. This specified period allows the attorney to cancel the contract or request it be altered. Both buyer and seller would then have to agree to the revised contract in writing. In some states, either party may void the contract without penalty during this period.
Q. What do I need to know about lead paint?
A. Lead was used as a pigment and drying agent in alkyd oil-based paint until use was banned in 1978. The federal government estimates that lead paint is present in 75 percent of all private housing built before then. It was commonly used on doors, windows, and other woodwork. An elevated level of lead in the body can cause serious damage to the brain, kidney’s, nervous system, and red blood cells. A lead-based disclosure statement must be attached to all sales contracts and leases regarding residential properties built before 1978, and a lead hazard pamphlet must be distributed to all buyers and tenants. Buyers have the right to test for lead paint; however, its existence does not automatically constitute a hazardous condition in all cases.
Q. What happens if the home inspections reveal a serious problem?
A. Generally, if the home inspections reveal a serious problem, the buyer who has a properly drafted contract can get out of the contract. What usually happens, however, is that the cost of remedying the problem becomes an issue of negotiation. This is where the negotiation skills of the seller’s sale associate can be critical in resolving the issue and keeping the home sale moving.
Q. What is radon and what is the purpose of radon testing?
A. Radon is a radioactive has produces by the natural decay of other radioactive substances. If radon dissipates into the atmosphere, it is not likely to cause harm. However, when random enters buildings and is trapped in high concentrations ( usually in basements with inadequate ventilation), it can cause health problems. The general rule fits the remediation is indicated if radon levels measure four picocuries (pCi/L) or more. Recent evidence suggests that radon may be the most underestimated cause of lung cancer, particularly for children, individuals who smoke, and those who spend considerable times indoors. Radon levels vary, depending on the amount of fresh air that circulates through a house, the weather conditions, and the time of year. It is relatively easy to reduce levels of radon by installing ventilation systems or exhaust fans.
Q. What should I do if my appraisal doesn’t go through?
A. It may reassure you to know that your Weichert Sales Associate will supply to the appraiser “market comparables” that will help substantiate your home’s selling price. Occasionally, however, the appraisal value may fall short. Should that happen, getting a second appraisal is one possibility. Alternatively, in many cases the buyer will be willing to makeup the shortfall, although you might have to make concessions, such as leaving behind appliances or other items you planned to take with you.
Q. What is title insurance and why do I need it?
A. Basically, title insurance help ensure that you have clear title to the home you’re purchasing and provides insurance protection in the event that anyone makes a claim to your property. A title search is the primary component of “due diligence,” a process that will be started either by your attorney, if you are using one, or by the title company you choose. The titles search determines whether the seller actually owns the property and if there are any claims against it.
Q. What happens if the house I want to purchase does not appraise at the amount expected?
A. If the house doesn’t appraise at the amount expected, other alternatives are typically found. A second appraisal may be sought, the buyer may be willing to put more money down, the seller may adjust the price or offer other concessions, or the two sides may negotiate to split the difference between them.
Q. Is there anything I can do to increase my chances of having an offer accepted?
A. In addition to making a strong offer and proving that you are well qualified, it’s very helpful to make a human connection. Most sellers, whether they realize it or not, want to believe they are selling to someone who really cares about their home. For that reason, it is best to have your offer presented in person. Your real estate agent can then make a case for you. You can also send along a personal letter to the seller. By describing your situation and expressing your feelings, you can make your offer more compelling.