Home Buying FAQs - What to Know About Buying a House
Q: When is the best time to buy a home?A: Put simply, the best time to buy a home is when interest rates are low. Within reason, your interest rate matters more than the selling price of the home. Over the life of a mortgage, you will be saving tens of thousands of dollars by buying when rates are low. Beyond timing your purchase with low interest rates, look to buy between Halloween and Thanksgiving, when you will typically get the best value for your money. Sellers are often more flexible on price when the heating season has begun, and plowing season is around the corner. Buyers often find that it's easier to expedite a closing when the summer rush is over, and, although the end of the year contains many non-working days, the fact that we know that going in means that people put a priority on getting closings done. Late fall may also be the time to revisit that "stretch property" and make a run at it.
Q: What does a real estate estate agent do for a home buyer?
A: We all now have access to search for homes online, but your Pearce real estate agent will use their experience and expertise on every step of your home buying journey--from the search process to negotiating offers, and to closing and moving day(s). A Pearce real estate agent’s local knowledge will help understand the local market, focus your needs and budget, cull through the listing databases to find the best fit, and cut through the jargon of home descriptions during the search process. That guidance continues through the whole process, always focused on the best interest of the buyer. Pearce agents are experts in the greater New Haven area and local market conditions. They will work with you to understand your priorities and help you through showings, paperwork, negotiations, inspections, communications, and coordinating it all. Think of your Pearce real estate agent as your advocate through the entire process.
Q: What to do before contacting a real estate agent?
A: Before you begin to shop for a home, show home sellers and your real estate agent that you are a serious buyer by getting pre-approved or pre-qualified.
Also, get a feel for where you want to live and what your needs and must-haves are by getting to know the communities around where you are looking, that way you can find a Pearce agent with expertise in the neighborhoods you are most interested in. Take a look at our community guide to see the unique towns and locations that could become your next beloved community. Then get in touch with your Pearce neighborhood expert who will guide you through your neighborhood and home search, and the entire home buying process! Be sure to check out our Home Buyers’ Guide for a step-by-step list of the home buying process.
Q: Pre-approved vs. pre-qualified for a mortgage: What is the difference?
A: Pre-qualification gives you an idea of your home shopping price range, based on your own reporting of income and your credit score. Pre-approved carries a bit more heft since it shows sellers that a bank is conditionally willing to loan you a certain amount for your home purchase. Getting pre-approval means that you’ll need to submit W-2s, tax returns, and other financial information to your mortgage company so that your lender can give you a more definitive and accurate amount of the house you can afford.
Q: How much house can I afford?
A: Most financial experts advise that your monthly home payments (including mortgage, property taxes, and potentially private mortgage insurance—or PMI) should be no more than 28% of your total monthly earnings. Additionally, your total debt (car payments, student loans, outstanding credit card debt, child support, etc.) should be no more than 36%.
Also, factor in potential utility costs, repairs, and other expenses. Often sellers will be able to provide you with some rough estimates of what they have paid for electricity, heating, water, and other monthly home costs so you can get an idea of what to expect. A 20% down payment will help you avoid additional PMI, which will add to your monthly payments.
Q: What to expect from a home inspection: why should I have one and what’s involved?
A: A home inspection covers you against buying a “money pit.” While no home inspection is foolproof, it gives you information on the status of the home’s inner workings so you have more knowledge about what you are buying. If major problems with the home come up during the inspection, and the sellers aren’t willing to correct them, a home inspection protects you with the right to withdraw your offer.
After your offer has been accepted, you’ll want to schedule a non-relative professional to check the property. You will then receive a written report. Keep careful track of the dates noted in your contract, because your right to withdraw without penalty expires at a certain time, and you only have about 10 days to get the inspection, report, and a written list of requested repairs to the sellers. Your real estate agent will help you prioritize what is most important to ask the seller to fix and help you negotiate with the sellers. Keep in mind that this list might vary, depending on the market. In any case, remember that you are looking for defects, not aesthetic choices. The fact that you'd prefer different appliances does not make that an item for the seller to address. The sellers will most likely counter on what they are willing to fix, or they might be willing take the money off of the price of the home.
Q: Are there any incentives for first-time buyers?
A: There are many creative ways for a first-time homebuyer to be able to obtain a mortgage. We usually recommend that buyers speak to a mortgage lender who can discuss first-time home buyer programs and options. Special mortgages for first-time homebuyers can eliminate the need for the usual 20% down payment, with some requiring as little as 5% or no money down, if buyers qualify. Other options that may be available are loans that incorporate the seller paying closing costs for buyers and buyers incorporating that amount into their mortgage over 30 years.
Q: What are home closing costs and how much will I pay?A: Remember that, in addition to your down payment, and payments to your real estate attorney, you will have to account for closing costs in your budget. These costs potentially include things like home insurance, property taxes, mortgage processing fees, among other items. Your mortgage company will be able to give you a rough estimate as you begin your search and then a final amount as you get closer to your closing date. Additionally, your Pearce real estate agent may also be able to help you in negotiating closing costs that might be able to be factored into the home purchase price.
Q: What is title insurance and why do I need it?
A: This policy protects against claims against the home’s title—by encroaching neighboring properties, earlier conveyances done improperly, or adverse possession. The title search affects home buyers from the time of purchase, and into the future, so you want it to be done correctly. In most cases, the attorney you hire for your closing does the title search. Mortgage companies generally require title insurance as a condition of the loan. Even if you wanted to forego title insurance, you would not want to resell your home without it. Your closing attorney is best suited to help you with specific questions since they deal with these issues on a daily basis.
Q: Why use Pearce Real Estate to find your home?
A: Pearce REALTORS® receive superior training, which means that you get superior representation throughout the process of buying your home. Our REALTORS® know the business and they pass that education on to you, helping you make informed decisions. We offer the experience and expertise you’re looking for in a trusted partner to guide you through a successful real estate transaction every time.
Since our beginning in 1958, the founding principle of our company has always been to take special care in "identifying our customers' needs and matching the right property to those needs at the best price." Adhering to the principle of satisfying our customers' needs first has enabled us to become one of the largest and most respected Independent Residential and Commercial real estate companies in Connecticut.