When you are looking for your next home there are a lot of questions that may come into play. To make it easier, here at Waddell Realty we have provided you with some Frequently Asked Questions for our Buyers.
If you cannot find the answer you are looking for, please feel free to contact us 706-653-1400
Q: I have poor credit, and I don’t have much for a down-payment, can I become a home buyer?
A: Yes, there are many programs available that may allow you to buy a home. You may be a good candidate for one of the federal mortgage programs that are available. A good place for you to start is by contacting one of the HUD-funded housing counseling agencies. They can help you sort through your options. In addition, contact your local government to see if there are any local home ownership programs that might work for you.
Q: What is a down payment?
A: The down payment is a percentage cost of the home that you must pay when you go to settlement. The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. That’s why many first-time home buyers turn to HUD’s FHA for help.
Q: What is earnest money?
A: Earnest money is the deposit you make on the home when you submit your offer. Earnest money proves to the seller that you are serious about wanting to buy the house. When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you.
Q: What does “Pre-Qualification” mean?
A: In a pre-qualification, you will be asked basic information about yourself and the type of home you are interested in buying. You will have the opportunity to view various mortgage programs and their rates. This will help you select a mortgage program that best fits your needs before you apply.
Q: Can I exclude the gain from the sale of my home?
A: You may qualify to exclude from your income all or part of any gain from the sale of your main home up to $250,000 for single tax filers, or $500,000 for married tax filers, if all of the following are true.
1. If you are married and want to qualify for the $500,000 exclusion, you must file a joint return for the year.
2. You, or your spouse if filing as married, must meet the ownership test.
3. For married persons, both you and your spouse must meet the use test. Singles must also meet the use test.
4. You, nor your spouse in case of married filers, have not excluded the gain from the sale of another home in the past two years. Read the complete text on the IRS website at Excluding the Gain, you should also consult with your CPA or tax adviser on this subject.
Q: What does the term “as-is” mean?
A: The term “as-is” means the seller is not going to make any repairs to the property. This, however, does NOT mean that the seller is exempt from disclosing known problems with the property. The seller must disclose all known defects to the buyer. Not disclosing known defects is fraud, a very serious crime. Homes sold “as-is” often bring a lower sales price, as the buyer will make price adjustments for known, necessary repairs. It is wise, and recommended, that the buyer have a professional home inspection done on the property. We also recommend that the buyer have a roof inspection done by a qualified roofing company, as well as have the pool and air conditioning system inspected by a service company.
Q: I need to sell my home first. How do I get my home ready for sale?
A: Before you invest any time or money in fix-ups, ask a professional like at Waddell Realty Co., LLC. Experience shows that we can save you time and labor by avoiding projects that are not valued or noticed by most buyers. Let’s discuss your particular home.
Q: What can a licensed real estate professional do for me that I can’t do for myself?
A: For sellers, important advantages include expert help with: -Analysis and advice on our local market -Negotiations with buyers and their agents -Qualifications and screening of prospective buyers -Contract details -Access to the MLS. For buyers we provide: -Time savings by finding prospective homes that meet your criteria -Essential information about the area, schools, taxes, etc. -Immediate notice of the newest listings on the market -Help finding the best lender and interest rate
Q: Should I buy a home, instead of renting?
A: Number 1, you will have a sense of personal satisfaction owning your own home. You will be able to create your own private space that is unique to you. When you own, you can do it all your way! Another benefit of owning is that you can deduct the cost of your mortgage loan interest from your federal income taxes. In the beginning, interest will compose nearly all of your monthly payment, for over half the number of years you will be paying your mortgage. This can add up to BIG savings at the end of each year. You are also allowed to deduct the property taxes you pay as a homeowner. Another financial plus in owning a home is the possibility of the home increasing in value over time. If you rent, you have nothing and face the possibility of increasing rental rates.
Q: What if my offer is rejected?
A: Your original offer is often rejected for one reason or another. But do not let that stop you. Now you begin negotiating. We will help you. You may have to offer more money, but you may ask the seller to cover some or many of your closing costs or to make repairs that would not normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember, do not get so caught up in negotiations that you lose sight of what you really want and can afford! We can help you keep on track.
Q: What are closing costs?
A: Closing costs are the costs associated with processing the paperwork to buy a house. Closing costs, which is paid at settlement, averages 3-4% of the amount of your loan. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing cost.