Frequently Asked Questions
WHAT’S THE FIRST STEP I SHOULD TAKE?
Answer: Unless you plan on paying with cash, your first step will be to get pre-approved for a loan. Once you get pre-approved, you will know with more accuracy the price of the home you can afford.
WHAT IS PRE-QUALIFYING VERSUS PRE-APPROVAL?
Answer: In pre-qualification, you are given an estimate of what you may be able to borrow. This is a quick way to know what price range you should be looking in.Pre-approval means a financial institution has agreed to work with you and has taken a thorough look through your finances.
Once the lender gathers initial information, and runs your credit report, then they will provide you with a pre-approval letter. A pre-approval letter should state that the lender has reviewed the buyer’s credit report, income requirements and cash to close and pre-approves the buyer for the loan, subject to an acceptable appraisal of the property.The amount that you are pre-approved to borrow is based on the ‘4Cs’ according to Freddie Mac:
Capacity: Your current and future ability to make your payments
Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
Collateral: The home, or type of home, that you would like to purchase
Credit: Your history of paying bills and other debts on time
WHY SHOULD I USE A REALTOR TO HELP ME BUY A HOME?
Answer: Your Z3 Carolinas REALTOR® will handle everything you need from start to finish. That includes paperwork, negotiations, inspections and so much more. A REALTOR® is your most valuable asset when buying a home. They will walk you through every part of the home buying process. They will educate and inform you of all your options. They will represent you throughout the transaction and beyond.
There is a difference between a REALTOR® and a real estate agent; many people do not know this. A REALTOR® is regulated by the National Association of REALTORS® and subscribes to a strict Code of Ethics. A real estate agent does not. It is recommended that you work with a licensed REALTOR® to avoid potential problems.
CAN I BUY A HOME AND SELL MY CURRENT ONE AT THE SAME TIME?
Answer: Yes, you definitely can. We would highly recommend working with a Z3 Carolinas REALTOR® to help make the transition between selling and buying as smooth as possible.
HOW MANY HOMES SHOULD I SEE BEFORE MAKING AN OFFER?
Answer: You should see as many as you need to ensure you find the perfect home. On average, home buyers will look at hundreds of homes online but will see less than 10 homes in person before writing an offer. If you’re looking for a way to narrow down your search, contact Z3 Carolinas
I FOUND A HOUSE… NOW WHAT?
Answer: Your Z3 Carolinas REALTOR® will help walk you through writing an offer on your dream home and will then handle the negotiations.
SHOULD I BUY A CAR BEFORE I BUY MY HOME?
Answer: No, buy your home first!
Why? For every $50 bucks you pay monthly you lose $10k of buying power! So if your car payment is $300, you lose about $60k in home loan approval.
HOW DO I KNOW IF THE PROPERTY IS A GOOD DEAL?
Answer: While you can never know how much a home is worth exactly, your Z3 Carolinas REALTOR® has been trained to use comparable properties to determine accurate pricing of homes. He or she will look at houses that have recently sold in the area that are similar to the one you are buying to ensure you are paying a fair price.
WHEN CAN I BACK OUT IF I CHANGE MY MIND?
Answer: You can always back out of a deal, but you may have to forfeit the due diligence & earnest money you put down with the offer. Due Diligence & Earnest monies are typically around 1%-2% of the home’s price.
HOW QUICKLY CAN I CLOSE?
Answer: It can typically take 30 to 45 days to close.
HOW MUCH DO I HAVE TO PAY A REALTOR® AS A HOMEBUYER?
Answer: Most of the time nothing
In most cases, you do not have to pay your REALTOR® anything to help you purchase a home. The sellers pays their REALTOR® a fee, and then that listing agent pays the buyer’s agent for bringing the buyer and facilitating the transaction.
Should the listing agent choose not to pay the buyer’s agent full commission then you will be responsible for paying the difference.
WHAT’S YOUR BEST ADVICE FOR FIRST-TIME HOMEBUYERS?
Answer: Trust the Professionals.
Beware of advice from people who do not work in the industry. Real estate is a popular topic and almost everyone feels like they have some great insight to offer. In reality, the people who know best are the people that work in the business. Good REALTORS® have sold hundreds (maybe thousands) of properties. We know what to expect and what to look out for. Friends and relatives have only bought and sold a few homes, if any at all. Buying and selling a couple of homes does not make someone a well-rounded source of information. I’ve seen too many first-time buyers become persuaded by well-meaning friends and family, only to be disappointed later. Be confident in your decisions, and trust the professionals.
WHAT KIND OF CREDIT SCORE DO I NEED TO BUY A HOME?
Answer: Usually 620+
A 620 credit score, or higher, is recommended. As you are probably aware, a higher credit score offers better lending terms. This is an ever-evolving topic, however, as loan requirements are constantly changing. There are some lenders who will approve buyers with a 580 score, sometimes even lower. Your loan officer will be the best source to give you a current answer for today’s lending requirements.
ARE THERE SPECIAL HOME BUYING PROGRAMS THAT I SHOULD KNOW ABOUT?
There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans.
We recommend doing a google search for down payment assistance for your county, city, and state and learn more about the requirements and how to apply.
HOW MUCH MONEY DO I NEED FOR A DOWNPAYMENT?
Answer: It depends on your loan type. The answer may surprise you, it’s no longer 20%. All loan options are different, but the average down payment is now 3% to 5%. The most common answer is 3% to 5% of the purchase price. FHA loans just dropped their requirement from 3.5% to 3.0%. There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down. Properties in rural areas are usually eligible for a USDA loan, which also requires no money down. However, you may encounter private mortgage insurance (PMI) during part of your loan, which will add on to your monthly mortgage payment until you pay off the PMI.
WHAT OTHER FEES ARE THERE, BESIDES THE DOWNPAYMENT?
Answer: Mainly loan origination and closing costs.
The down payment is usually the largest cost associated with buying a house. Lending fees are the second largest costs to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. There are some lenders that have flat fees. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.
WHY SHOULD I BUY A HOME INSTEAD OF RENTING ONE?
Answer: The real estate market is constantly changing, but often, it is more cost-efficient to buy a home rather than rent one. Think about it. When you buy, you are investing in your own future. When you rent, you are helping your landlord to invest in his or her future! There also are financial perks like tax deductions and home equity that come along with owning a home.
HOW DO I KNOW HOW MUCH HOME I CAN AFFORD?
Answer: So that you don’t enter the home-buying process blindly, it is a good idea to meet with a bank or lender, who can help you determine a range of home prices that you may be approved to buy in. Lenders will consider how much a buyer makes, how much debt they have, any assets they own and their credit history before issuing a preapproval letter, which details the amount they can purchase, providing their financial picture does not drastically change during the home-buying process.
HOW DO I FIND THE RIGHT LENDER?
Answer: When it comes to financing a home, it is a good idea to shop around. Many buyers often start with their own personal banking institutions or credit unions. The federal government offers competitive loan programs for first-time homebuyers as well. Buyers can seek out mortgage rates from several lenders before selecting the one that is best for them.
AM I ABLE TO BUY A HOME WITH AVERAGE CREDIT AND LITTLE OR NO MONEY DOWN?
Answer: This question is one reason that it is always a good idea to shop around for a mortgage. In most cases, there are loan programs for nearly every homebuyer who is looking to get into the real estate market. A buyer’s credit score and down payment may impact the amount they’re approved to buy or their financing rate, but there are typically mortgage options to meet many financial situations.
WHAT IS PMI?
Answer: PMI or private mortgage insurance is something that lenders use to protect themselves against a buyer who defaults on their home loan. PMI is money a buyer pays along with their principal and interest to reimburse a lender in case they default. This fee is usually lumped into a buyer’s monthly mortgage payment until about 80% of their home is paid off, at which point PMI is typically cancelled.
WHAT DOES A MONTHLY MORTGAGE PAYMENT COVER?
Answer: When a first-time homebuyer is looking to purchase a home, it is important to realize that a monthly mortgage payment does not cover all of the monthly expenses that go along with home ownership. Often times, a monthly mortgage payment covers the principal amount borrowed, homeowners’ insurance, property taxes, interest fees and PMI, if applicable. Monthly mortgage payments do not cover things like utilities, cable and internet service or homeowners’ association fees.
DO I NEED A REAL ESTATE AGENT?
Answer: Technically, it is possible to buy a home without a professional real estate agent. It’s just a whole lot harder to do on your own. Not only have professional real estate agents received training to help buyers, but they’re also up to date on current market conditions, real estate procedures and the closing process. They’ve also got helpful industry contacts, like lenders, appraisers and other service professionals at their disposal that can make the buying-process go more smoothly. Finally, a professional real estate agent is happy to represent a buyer while making an initial offer, negotiating on price and at any other time during the home-buying process.
WHAT HAPPENS DURING THE CLOSING PROCESS?
Answer: After buyers and sellers agree on a home’s price, the closing process begins, and it typically lasts between 30-60 days. During this time, the purchase contract is drawn up and signed, financial documents are finalized, home inspections and appraisals are completed, and various other legalities are handled, too. On closing day, both buying and selling parties meet (often for the very first time!) to sign final documents and hand over the keys!
Hopefully, these FAQs helped to quell a few questions and worries,
should you have more questions schedule a FREE NO COMMITMENT consultation with Z3 Carolinas
WHAT IMPROVEMENTS WILL HELP ME SELL MY HOME?
Answer: Too many sellers have extreme anxiety over the thought of having to clear out and fix up their home, so much so that it can delay or even prevent them from putting the place on the market in the first place. But in most cases, there’s no need to panic here—or to overshoot your goals. Often there’s far less to do than sellers think. Before spending months and thousands upgrading your place—or just throwing up your hands and giving up before you begin—contact Z3 Carolinas REALTOR® to take a look at your property in order to provide you feedback. You might be pleasantly surprised by your current sales prospects. Start with the basics. Fix all minor mechanical issues (such as loose doorknobs and leaky plumbing), clean everything well, keep the yard maintained, and put fresh pine straw or mulch in the flower beds. Power wash decks and other surfaces if needed.
SHOULD WE SELL BEFORE WE BUY ANOTHER HOME?
Answer: Check with a lender first to learn if this is an option. Ask yourself if you are willing and able to carry two mortgages and deal with the stress that comes from physically and financially maintaining two homes. Z3 Carolinas REALTOR® are experienced with guiding our clients to help them determine if they should sell or buy.
SHOULD I SELL MY HOME MYSELF?
Answer: It will take longer on average, to sell a home yourself. Homes listed with Z3 Carolinas are sold in less than 30 days and average of 5-10% over listing price when the home is priced right. If you are willing to not get top dollar for your home, willing to spend a lot of time & money to market, and want to manage the sale process, showings, and vetting qualified buyers you may want to consider this option. If you decide to sell your own home, contact us for all the latest legal forms and tips.
WHY SHOULD I HIRE A Z3 CAROLINAS REALTOR®?
Answer: Z3 Carolinas REALTOR® can lead you through the listing and selling process with ease. Aside from improving your quality of life during your family’s transition, our agents may help you net more money for your home. Our agents know the local market, proper pricing and how to achieve a faster sale. We are the eyes and ears able to help avoid pitfalls. We are the professionals that know and identify trends/shifts and can help you pivot to protect your equity. We run in circles and have info and intel and are versed in laws and resources that keep everyone out of Jail. Often, owners who sell their own home For Sale By Owner are asked by potential buyers to discount the commission rate that would be given to an agent. In that case, you have all the work, all the complications and none of the financial rewards. Let Z3 Carolinas do all the work while you net top dollar for your home and relax and focus on your next home.
WHAT IS THE AGENT'S COMMISSION?
Answer: The commissions are negotiable and something that you decide based upon the agents marketing plans. It is important to know what part of the commission is shared with the buyer’s agent too, often this question is not asked, and it is absolutely critical because many buyers agents do not show homes that offer them a commission of less than 2.5% of the sales price. Here are some facts to keep in mind: Unlike lawyers who get paid by the hour, or doctors who are paid by the appointment, listing agents don’t get paid unless they make a sale. For every hour a proven successful professional real estate agent spends with a client, he or she will typically invest 9 hours on average every week working on that client’s behalf contacting a daily average of 30 potential buyers and agents working with buyers for your home. Always ask your potential real estate agent, how many contacts are you making? And no, not all agents are created equal. Since most contracts last for a year, we recommend that sellers interview three agents prior to selecting one to represent them. It’s no different from choosing an attorney, accountant, or stockbroker. You want to be sure that you trust that person and are comfortable with them.
IS IT EASIER TO SELL A HOME THAT IS VACANT?
Answer: You should only consider vacating your home before placing it on the market if your furnishings are poorly maintained or the environment is overly cluttered. Vacant houses often take longer to sell, or that they sell for less than furnished, occupied, or staged homes. Research has shown that empty houses also sell for 6 percent less, on average.
There are a number of factors that contribute to this:
•Price becomes your primary marketing strategy when the home is empty
•Buyers are going to think you’re in a rush to sell, causing them to submit lower offers
•Rooms look smaller when they’re empty
•Flaws in the home are more obvious without furniture, rugs, and decor to help hide them
And while all of these things seem pretty trivial when you look at them individually, they can create an overall poor impression in a buyer’s mind when combined.
IS STAGING REALLY IMPORTANT?
Answer: On average, a staged home sells 88% faster—and for 20% more money—than a home that’s left as is. The reason it works, of course, is it gives buyers a “stage” onto which they can play out their home-owning fantasies and envision themselves living in your home. Choose neutral paint colors and remove any family photos, because only 10% of people have the ability to visualize before and after. You need to give would-be homeowners a blank canvass (When you are struggling with color, go for grey, off-white. It is always best to start with neutral tones and layer on top of that, or add pops of color as you go. Yet while it’s important to convey a feeling of sophistication, you also want the space to feel homey and lived in. You can do this with cashmere throws on the couch or a cookbook on the kitchen counter open to a recipe. that they can mentally fill with possessions, their loved ones, and themselves.
SHOULD WE HOLD AN OPEN HOUSE?
Answer: Yes. Open houses also provide sellers with an opportunity to receive instant feedback about their home. Holding an open house as soon as your home goes on the market can give you an opportunity to find out what buyers like—and do not like—about your home. If you need to do any additional staging or decluttering, you’ll know right away and can make necessary changes. Holding an open house could make your home available to buyers who didn’t even consider themselves to be serious. Perhaps a neighbor or community member has always had their eye on your home—or a home like yours. Holding an open house gives them an opportunity to see what could be—and what could be theirs! Our professional marketing plan offers more marketing than just open house.
HOW WILL I BE KEPT INFORMED OF MARKETING PROGRESS TO SELL MY HOME?
Answer: This topic is often frustrating for sellers. Z3 Carolinas agents are excellent at communicating and keeping their sellers informed. You will have access to your entire sale online and receive timely updates throughout the process. Most importantly, Z3 Carolinas is always available to answer your questions and concerns via phone, text or email. Per our first send out, when you are selling your home, it is critical that you be kept well informed.
WHAT ISSUES SHOULD I DISCLOSE?
Answer: The seller must disclose all pertinent facts about the home that are not easily seen. A good rule of thumb: if you are compelled to ask “should I disclose this?” – the answer is yes. The Seller’s Property Disclosure Statement must be filled out honestly and completely to help protect you.
SHOULD I PROVIDE A HOME WARRANTY?
Answer: If your home is more than five years old, then it may be a wise investment. Many companies offer warranties for $400 – $600. Z3 Carolinas agent can help you with the application. Z3 Carolinas offers a one-year home warranty in several of our listing packages as part of our commitment to quality service
WILL I HAVE TO PAY CLOSING COSTS?
Answer: The seller is not obligated to pay closing costs. However, it may be advantageous if you have a qualified buyer who does not have liquid assets for these costs. Closing costs are typically 2-2.5% of the buyer’s loan amount. Remember to focus on the net amount you receive, rather than the contract price.
AFTER THE CLOSING, MAY WE STAY AND RENT OUR OLD HOME FROM THE NEW OWNER UNTIL WE ARE ABLE TO MOVE INTO OUR NEW HOME?
Answer: Yes, Z3 Carolinas agent have proven strategies and resources to help negotiate lease backs.
WHEN SHOULD I TURN OFF THE UTILITIES?
Answer: Call the utility companies to have them perform a final reading on the day the buyer takes possession. The buyer will need call to have the service transferred to their name.
WHAT ITEMS AS A SELLER WILL I BE EXPECTED TO PAY?
Items the Seller Can Generally be Expected to Pay:
•Real Estate Commission
•Document preparation fee for deed
•Documentary transfer tax, if any
•Payoff of all loans in Seller’s name
•Interest accrued to lender being paid off
•Statement fees, reconveyance fees and any prepayment penalties
•Termite inspection (or according to contract)
•Termite work (or according to contract)
•Home warranty (or according to contract)
•Any judgments, tax liens, etc., against the Seller
•Tax proration (for any taxes unpaid at time of transfer of title)
•Any unpaid homeowner’s dues
•Recording charges to clear all document of record against Seller
•Any bonds or assessments (or according to contract)
•Any and all delinquent taxes
•Seller Notary fees
•Escrow fee (one half)
•Title insurance premium for Owner’s policy
•Homeowner’s transfer fee
•City transfer/conveyance tax (or according to contract)
Sell your house with Z3 Carolinas and save thousands. At Z3 Carolinas we offer superior service with knowledge and experienced agents and advanced technology. Our sellers enjoy faster closings and the best return on their investment. We use data, analytics, and buyer feedback to create an intelligent marketing and sales strategy to help you sell your home quickly.
Schedule your free listing presentation today.