Frequently Asked Questions (FAQ)


1. What the first step of the home buying process?

Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender is typically based upon your credit score.

Here’s why:

You need to know how much you can borrow. Knowing so narrows down the property search to fit within your budget. There is no sense in falling in love with a house you are not financially approved for.

Next, the loan estimate from your lender will detail the amount of money needed for the down payment and closing costs. You may or may not need more time to save up money, liquidate other assets or obtain other funding sources.

Finally, a pre-approval letter lets a seller know you are not only serious but are ready to do business with them. Also, the letter provides safety to the seller as less people and thieves will be walking through and looking at their home.


2. How long does it take to buy a home?

Under normal market conditions, the average time to complete the sale of a home is 30 to 45 days. Well-prepared home buyers have been known to purchase properties faster than the averages. We help you to be well prepared for your buying venture. Keep in mind that in a hot market, the demand for appraisals and inspection increases and cause unexpected delay as hot markets don’t guarantee an increase in the number of property appraisers and inspectors.

3. What is a seller’s market?

In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:

  • Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
  • Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first time home buyers who can afford bigger homes as the cost of money goes lower.
  • A short-term spike in interest rates – may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded.
  • Low inventory – fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.

4. What is a buyer’s market?

A buyer’s market is a decline in home prices and reduced demand. Several factors may affect long-term and short-term buyer demand, like: Economic disruption – a big employer shuts down operations, laying off their workforce.

  • Interest rates trending higher – the amount of money the people can borrow to buy a home is reduced because the cost of money is higher, thus reducing the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals.
  • Short-term drop in interest rates – can give borrowers a temporary edge with more purchasing power before home prices can react to the recent interest rate changes.
  • High inventory – a new subdivision and can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features (modern appliances, etc.)
  • Natural disasters – a recent earthquake or flooding can tank property values in the neighborhood where those disruptions occurred.

5. What is a stratified market?

A stratified market happens where supply and demand characteristics differ by price point, in the same area (typically by city). For example, home sales for properties above $1.5M may be brisk (seller’s market) while homes under $750k may be sluggish (buyer’s market). This scenario comes along every so often in West Coast cities where international investors – looking to park their money in the United States – buy expensive real estate. At the same time, home sales activity in mid-priced homes could be entirely different.

6. How much do I have to pay an agent to help me buy a house?

Home shoppers pay little or no fees to an agent to buy a home.

Here’s why:

For most home sales, there are two real estate agents involved in the deal: one that represents the seller and another who represents the buyer.

Listing brokers represent sellers and charge a fee to represent them and market the property. Marketing may include advertising expenses such as radio spots, print ads, television and internet ads. The property will also be placed in the local multiple listing service (MLS), where other agents in the area (and nationally) will be able to search and find the home for sale.

Agents who represent buyers (a.k.a. buyer’s agent) are compensated by the listing broker for bringing home buyers to the table. When the home is sold, the listing broker splits the listing fee with the buyer’s agent. So in other words, buyers don’t pay their agents.

7. What is earnest money?

When you make an offer on a home, your agent will ask for a check to accompany it (checks are the same as cash, and the deposit is typically 1% to 2% of the purchase price). Earnest money is made in good faith to demonstrate – to the seller – that the buyer’s offer is genuine. Earnest money takes the home off the market to anyone else and reserves it just for you.

The check (or sometimes cash) is deposited in a trust or escrow account for safekeeping. If a deal is struck, the earnest money is applied to the down payment and closing costs. If the deal falls through, the money is returned to the buyer.