Home Buyers FAQ
(frequently asked questions 🙂
Can I get into a home with no money down?
This is always an interesting question to answer and that’s because the answer is technically yes, but in reality no. Confusing right? Let us explain. If you are using the right loan, like a rural development or VA (Veterans) loan, and you ask for the seller to pay closing costs you can get to the closing table and not have to pay a single cent. BUT you have to put down earnest money when you make your offer. Once the offer is accepted that check is cashed. You get the credit for it at closing; you may even get money back at closing but you still had to shell the money out of your checking account at the beginning of the deal.
However the majority of the loan options available right now require a downpayment of at least 3-3.5%.
What are my out of pocket expenses (before closing)?
- Earnest money
- Home inspection fees
- Appraisal fees (in some cases)
- Utility deposits
Plus don’t forget moving expenses!
What will my mortgage cover?
Your mortgage payment covers PITI:
Principle – repayment for the money you borrowed
Interest – payment to the lender for money you’ve borrowed
property Taxes – the annual taxes assessed on your property
homeowner’s Insurance – paid to your insurance company to insure the property against loss
Many loans also have a Private Mortgage Insurance (PMI or MI) monthly payment added. This is to provide protection to the bank/lender if you happen to default on your loan. This can be as little as .3% to .85% of purchase price each month.
What in the world does a real estate agent do?
Our job as your agent is to give you all the facts and our professional advice so you can make an informed decision. Will we make the choice for you? No, but we will provide you with the best information available to us and let you know what your options are. Once you have a home under contract, we communicate with all parties of the transaction, make sure the paperwork is up to par, and keep the transaction moving forward.
What does it cost to use an agent to help me with my purchase?
We only get paid if/when you purchase a home. You don’t pay us for showing you homes or writing offers on homes that are not accepted.
Our fee as a buyer’s agents is 3% of the sales price plus sales tax on the home that you purchase and $150 administrative fee. 99% of the time this fee is paid by the seller.
You might be responsible for this fee if we write an accepted offer on a “For Sale By Owner” or “Assist to Sell” home that is not offering payment to a buyer’s agent…or if any seller is offering less than 3% professional services fee.
In these cases, we will ask for the seller to pay the professional service fee in the offer. If the seller refuses, you would be responsible for our fee if you still want the house. Our professional service fees and administrative fee are paid at closing.
Do I have to sign any stinkin’ paperwork to hire an agent?
Yes. But it’s pretty easy stuff. Signing the Buyer/Broker Agreement allows us to officially represent you as your broker by forming an “agency” relationship. We are required by state law to make sure you understand how us realtors work and how it affects you.
Similar to doctor/patient and lawyer/client, this agency is a binding agreement between you, the buyers, and us, the agent. It gives us a fiduciary responsibility to represent your best interests including reasonable care, loyalty, and confidentiality.
What if I don’t want to sign the Buyer/Broker Agreement?
By SD law, we are only allowed to show you one home (one home/one time) without a buyer/broker agreement. We also would not be able to give you our personal or professional opinion in regards to any home we may look at.
Do I have any responsibilities as a buyer?
After you have signed the Buyer/Broker agreement, we have a few “rules” for all clients.
The first and most important rule is that you contact us when you want to see a property. Please don’t call the agent who has the home for sale and please, never call the owner of the home, or just show up at the home unannounced asking to see it. This is not only to be courteous to the seller, but also so we can be there to protect your interests.
Another rule is for you to tell us exactly what you think. You will not hurt our feelings or waste our time if you don’t like the home. But, in order to work efficiently, we need to discuss how you truly feel about any home we preview.
We want you to be comfortable working with us. But we also want you to understand we know what we are doing. We’ve done this before. Please trust our experience and listen to our advice seriously. In the end, we will do as you would like, we just don’t want to come back and say “I told you so…” 🙂
Ready? Set up a time with us to go over the process, answer your questions, and get rolling!