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Most Common Real Estate Buying Questions Answered

Most Common Real Estate Buying Questions Answered

Whether you’re buying your first home or your eighth, you need to ensure the process doesn’t get too overwhelming. The best way to do this is to educate yourself about the process.

Below are 3 of the most common real estate questions that home buyers ask.

1. What’s the first thing I should do when starting my home search?

The first thing you should do is get a mortgage pre-approval. The benefits of getting pre-approved are huge. Not only will you find out how lenders look at you in terms of your credit score and income, but you’ll know how much house you can afford. You’ll be able to set a more realistic budget prior to finding a home and even lock in your interest rate.

One of the biggest dilemmas buyers get themselves into is starting their home search prior to being pre-approved. They find the home of their dreams only to be informed that it’s more than they can afford. Realtors® work with many reputable mortgage brokers that can make the process of pre-approval simple and quick to get you on your way to homeowners bliss.

Most Common Real Estate Buying Questions Answered Keys Image2. Should I sell my current home before purchasing a new one?

Some people believe they need to sell their old home before they can buy a new one. Yes, it’ll allow you to use all your equity on the new purchase but it can also leave you temporarily homeless. There are many options available to those that want to buy a newer home but need to sell at the same time. They include:

  • Subject to Sale Clause: the buyer puts an offer on a property, but the Offer to Purchase has the condition that the buyer first needs to sell their home.
  • HELOC Loans: a home equity line of credit allows you take out a loan using the current home’s equity.
  • Mortgage Portability: you take your current mortgage and port it over to the new mortgage. In this scenario, you’d combine what’s left of the current mortgage – including the mortgage rate and terms – and the new mortgage.
  • Mortgage Payoffs: including the current mortgage balance into a mortgage on the new home.
  • Bridge Loans: a short-term loan that a lender gives when a homeowner has a solid offer on his or her home but needs liquid cash to make a new purchase.
  • Unsecured Loans: similar to a HELOC except there’s nothing securing the loan. The interest rate on this type of loan is often much higher than with a HELOC and you need to have a high credit score.
  • Rent It Out: sometimes waiting to sell may be the best solution, especially in a slow market. If you want to purchase a new home without taking a financial hit, you may be able to recoup some of your costs by renting [ To Rent or to Buy: What’s Your Best Option? ] out the old place in the meantime. You can sell it once the market improves.

As you can see, there are many options for selling your current home and buying a newer one at the same time. A mortgage broker can help you sort through which option is best for you.

3. Do I really need to use a Realtor to buy a home?

The short answer is no, but there are many benefits to using one. A real estate professional, in this case, the buyers’ agent, will protect YOUR interests. They will also use their expertise in the area and market to negotiate a fair price for you. 

The one main confusion amongst homebuyers is they believe they have to pay the real estate commission. This is false. As a home buyer, you can choose any real estate agent in Edmonton to work for you at no expense. In most cases, Real estate fees are paid through the proceeds of the sellers home. Your buyers’ agent will work diligently to find you a home and he or she does not get paid until that happens. Contacting the sellers’ agent to view a property they have listed because “you feel you want to work with the agent that is selling the home”, works against protecting your interests. You want to have an agent on YOUR side, not an agent that is on the side of their sellers.

Even an experienced home buyer can forget how the process works to ensure the transaction goes smoothly. We hope these answers have helped with some of your own questions. If you’re still looking for answers, feel free to contact a reputable Realtor® in Edmonton with any other questions you may have.

 

Photo credits: question housekeys

About The Author

Jeff S.

Proud father and husband. Loves music, Nine Inch Nails, UFC and inbound marketing.

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