Buyer F.A.Q's

Answers to frequently asked buyer questions:

 

Q: I'm thinking about buying a home. Where do I start?

A: The first step for potential homebuyers is a credit check. It's best to keep an eye on your credit reports so you can spot any mistakes and dispute them. You should also avoid running up high credit card bills in the months prior to buying a home.

These two steps will help you in the next phase of your game plan, pre-approval on a mortgage. A full-service real estate broker can help you with this portion of the plan. Pre-approval includes analyzing your income, assets, and present debt to estimate how much house you can afford. This means the lender has committed to loaning you money subject to the house you choose to buy. Being pre-approved for a loan will make you attractive to sellers because the contract won't be tied up with financial issues.

After you know how much you can spend, you're in the homestretch. This is the time for you to become familiar with neighborhoods and the features of a home. Educate yourself by visiting local real estate web sites and viewing the listings. This is also the time for you to decide what you want and need in a home.

A solid game plan needs a good coach. A Hottinger Real Estate, Inc. Realtor can help you through all steps of the plan, prepare you for any unforeseen problems and eventually help you to buy the home of your dreams.

 

Q: What should I consider when I start to look for a home?

A: First, put together a list of features and benefits you want in a home. Think of such things as pricing, location, size, and amenities. If you can't get a home at the price you want with all the features you're looking for, figure out what features are most important to you and rank them in priority so you know what you're willing to give-and-take. For instance, you could choose to have a large kitchen and smaller bedrooms?

You should also consider your future needs. Maybe now is the time to buy a larger home rather than buying a small home and expanding it in the future. Your agent can help you compare the price of homes with the features you are looking for or suggest alternate uses of space.

 

Q: Should I buy first, or sell first?

A: The answer to this question lies squarely with you. Do you need the equity that's built up in your present home to complete the purchase of a new home? If so, you either need to sell first or consider a bridge loan or house sale contingency. If not, you may choose to buy first and sell later. Before making a final decision, Hottinger Real Estate, Inc. strongly suggests that you engage a real estate agent with whom you can enter a trusting relationship. Then discuss this question with him or her, touching on every aspect of what it may mean for your particular situation.

 

Q: How do I choose between renting or buying?

A: Owning a home offers tax benefits, as well as the freedom to make decisions about where you live. Homeowners, unlike renters, can secure a fixed-rate loan and lock in their monthly payments, so they can make investment plans knowing their expenses won't change substantially. Renters are at the whim of their landlord, who can raise the rent each year without a renter's input. Homeowners, on the other hand, are in control of their property and decide whether they allow pets, decorating, or permanent improvements.

 

Q: Do your real estate agents cooperate with other companies' agents?

A. Our agents work according to specific laws, regulations, and customs in their respective areas. In every market that Hottinger Real Estate, Inc. serves, brokers and agents from different companies work cooperatively, showing and selling each other's listed properties.

 

Q: Why do I need an agent to help me find a home with all of the technology and advertising available?

A: The Internet and newspaper are good places to start researching the current housing market. You can also find information to help answer many of your financing questions. But once you've looked at what's available, it's a good time to get a professional involved.

If you go it on your own, you might spend hours scanning newspaper ads and home magazines, driving through neighborhoods seeking "for sale" signs, or phoning about individual listings and still miss some of the best available homes. A Hottinger Real Estate, Inc. agent will save you time, money, and provide access to a wealth of information resources to help find that special home.

 

Q: If I'm thinking about buying a newly-constructed house, why do I need an agent?

A: Building a home often requires hours of research and decision-making. You must first decide what area you want to build in and which builder you want to use. After these initial decisions, you still have many choices of floor plans, building materials, and fixtures.

Personalization and freedom of choice are some of the benefits of building a home, but they can also be very stressful. An agent will guide you through the entire home building process and help you along the way should you need it. You'll still get to make the choices on your own, but your agent will be there to help, keeping your best interests in mind. Plus, buyer representation comes at no cost to you.

 

Q: Is Hottinger Real Estate, Inc. a member of the Multiple Listing Service (MLS)?

A. Yes - Hottinger Real Estate, Inc. is a member of the local MLS, as well as being members of the national, state, and local Associations/Boards of Realtors®

 

Q: What typically goes into an agreement for buyer representation?

A: Like any contract, a buyer representation agreement needs beginning and ending dates. It also has an acknowledgement of your willingness to be represented by the company and its agent, as well as the amount, if any, that you'll pay for real estate-related services. Buyer agreements may also indicate whether you'll work with only one company/agent or several.

 

Q: What is an Agency Disclosure?

A: An Agency Disclosure is a state-required document, disclosing to you as a principal-in this case, the buyer-in a real estate transaction whom the agent or agents in the transaction represent. A state's Agency Disclosure simply notifies you of that state's agency laws; it does not obligate you to work with any particular agent or broker.

 

Q: How are buyer's agents compensated?

A: The buyer and real estate agent come to terms on which services the buyer needs and the way the agent will be compensated for providing these services. In most cases, a fee or commission is based on the seller's proceeds of sale and shared between the seller's (listing) and buyer's (selling) agents. In some cases, the buyer makes a direct payment to his or her agent.

Buyers sometimes pay their agent/broker directly for finding and purchasing a home. If a broker charges buyers a direct fee, it should be outlined in an exclusive agency agreement that the buyer signs when engaging the broker.

Payment arrangements vary, depending on market conditions, customary practices, and consumer expectation. Some eager home buyers offer an incentive to give their real estate agent additional motivation (generally a cash bonus when title transfers) to find them the "right" property.

As you interview prospective agents and weigh their respective services, consider which compensation options and terms will get you in the home you want and meet your individual needs.

 

Q: What do all of those abbreviations in property ads mean?

A: If you find yourself stumbling to understand a property description, you're not alone. We've composed a list of some of the most frequently used abbreviations to help you understand a BA from a BR and more.

BA

 

Bath

 

FDR

 

Formal Dining Room

 

BR

 

Bedroom

 

LR

 

Living Room

 

MBR

 

Master Bedroom

 

DR

 

Dining Room

 

FP, frplc, fplc

 

Fireplace

 

FR

 

Family Room

 

WBFP

 

Wood Burning Fireplace

 

LL

 

Lover Level

 

Entr

 

Entrance

 

grmet kit

 

Gourmet Kitchen

 

Dck

 

Deck

 

Pvt

 

Private

 

Gar

 

Garage

 

pwdr rm

 

Powder Room

 

Brk

 

Brick

 

Upr

 

Upper Floor

 

HDW, HWF, Hdwd

 

Hardwood Floors

 

Q: As a buyer, do I have the right to obtain past information about the property I'm interested in purchasing?

A: Yes. Sellers are required to disclose all known property defects. With your agent's help, you can find out what has happened to the property in the past. You should make careful observations, examine the property, and request or otherwise obtain any other important records. Put these requests in writing. If you decide to put an offer on a home, it's important to have a professional inspection completed before closing.

 

What is title insurance?
Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attach before date of policy.

What is a wood-destroying organism inspection report?
A wood-destroying organism inspection report is a written opinion by a qualified state licensed structural pest control inspector based upon what was visible and evident at the time of inspection. The inspection report does not in any way represent or guarantee the structure to be free from wood-destroying organisms or their damage, nor does it represent or guarantee that the total damage or infestation is limited to that disclosed in the report. Wood-destroying organisms include subterranean termites, dampwood termites, carpenter ants, wood boring beetles and wood decay fungus.

What are the hazards of lead-based paint?
All buyers and sellers are required by law to receive and read a pamphlet outlining the hazards of lead-based paint for homes built before 1978. Be sure to ask your real estate agent for a copy.

What are closing costs?
Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. For sellers, they are usually about 9.5-10% of the total sales price of a property. Some of the closing costs you might encounter are: discount points, escrow fee, documentation fee, homeowners' association fees, pest/rot inspection, real estate commission and title insurance premium.

What is the difference between "pre-qualified" and "pre-approved"?
If a buyer is "pre-qualified" it has been determined, with a loan officer, what price the buyer can afford based on the down payment, debts and the amount the mortgage company will approve for the mortgage. Being "pre-qualified" is only a determination of probable credit. If "pre-approved", credit, employment and funds have been approved by the lender.

What should a home inspection include?
Every inspection should include, but not be limited to, an evaluation of the following:

1. Foundations

2. Roof

3. Heating and air conditioning systems

4. Ventilation

5. Common areas (for condominiums)

6. Septic tanks, wells or sewer lines*

7. Insulation

8. Plumbing and electrical systems

9. Ceiling, walls and floors

10. Doors

11. Hazardous materials concerns*

* There may be an additional fee for this.

 

What property details are usually included by Listing Services?
Usually, properties listed will include the following details:

  • Location
  • Photograph
  • Price
  • Utilities
  • Amenities
  • Annual property tax
  • Current financing (when assumable)
  • Listing company

 

What pages are generally included in the Purchase and Sales Agreement?

·         Agency Disclosure

·         Financing Addendum/Clause

·         Earnest Money Receipt

·         Inspection/Clause

·         Conditions/Disclosures Addendum

·         Contingency

·         Addendum Outlining Special Conditions

·         Lead-Base Paint Notification

·         Property Disclosure Form (completed by Sellers)

What is the difference between a REALTOR® & Real Estate Agent?
REALTOR® identifies real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict Code of Ethics. Not every real estate agent is a REALTOR®. A REALTOR®may be an appraiser, property manager or involved in some other aspect of the real estate business.

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Byron Cashion
Hottinger Real Estate, Inc.
Ph: 972-524-5683Fax:972-563-5852
203 N. ROCKWALL AVE.
TERRELL, TX 75160 US
Licensed Real Estate Broker 0518016
www.hretx.com
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