Buyer FAQ

Do I really need a REALTOR® when buying a home?

Having a REALTOR® makes the home buying process easier and smoother. A great REALTOR® can set up home showings, negotiate with the seller, ensure that closing documents are being submitted in a timely manner, and speak the language of real estate with professionals in the industry. They can advise you on whether a property is appropriately priced, and can take care of important paperwork and communication. A REALTOR® is there to represent YOUR best interest when buying a home. They can answer questions you may have about the home-buying process, and generally reduce the stress level involved in purchasing a home.

 

Who pays the REALTOR® fees?

Traditionally, the seller pays both the buyer and seller’s REALTOR® fees at closing. Sometimes the seller asks that the buyer covers some or all of the REALTOR® fees, but not usually.

 

Should I get pre-approved for a loan before looking at homes?

ABSOLUTELY, YES! Not only will this set you at ease that you are approved for a loan to buy a home, but it gives you an idea of your price range. The bank will approve your loan up to a certain dollar amount based on your income and credit history. Ultimately, it’s up to you to determine what a reasonable monthly payment would be, and to calculate what your buying-power looks like based on your budget.

Your REALTOR® can help you do the math to figure out your top home price based on your estimated monthly payment. Don’t forget to estimate for taxes, homeowner’s insurance, etc.

 

I found some homes on Zillow that I really like. Can we go look at them?

Absolutely! If you don’t already have a REALTOR®, check out our Agents page and then contact us. We can arrange showings for homes, and can also find more properties based on your search criteria that you may not have found online.

 

Should I buy a home, or continue to rent?

The answer to this question all depends on a number of factors. With interest rates as low as they currently are, it is generally less expensive to pay mortgage than it is to pay rent.

One of the most important things to consider is the length of time you intend to stay in your home. If the answer is just a year or two, it may be a better idea to stick with renting. Another question to ask is whether or not you are ready to take on the additional responsibilities that go along with home ownership. When the furnace breaks, there is no landlord to call to come fix it. That responsibility falls to you!

Buying a home is sometimes a really great option, but not always. A good REALTOR won’t pressure you into buying, and can give you sound advice on what is the best option based on your circumstances. The choice is ultimately up to you, though.

 

I own a home. Should I sell it first before buying another house?

The answer is…it’s up to you. There are certainly pros and cons to buying first or selling first. It’s up to you to ask yourself which scenario you are more comfortable with.

Selling First – How long your home will take to sell is unpredictable. Selling your home first puts you in an advantageous position when making an offer on a new house because there is no Sale Contingency attached to the offer. The seller is more likely to accept your offer. The issue with this scenario is finding a temporary place to live.

Buying First – The perk of putting an offer on a new home before your current home is sold is that you have a smooth transition from one home to the next. The drawback is that the Sale Contingency in your offer on a new home could mean that the seller chooses to accept an offer from a competing buyer who does not have that contingency. Another possible scenario is that your home does not sale, and you end up losing the house of your dreams because you get bumped by a non-contingent offer.

 

What is a Short Sale?

A short sale is the sale of a home for a price that is less than the current liens on the home. For example, a homeowner has a $200,000 loan on a home that appraises at $175,000. When they sell the home, they either have to come up with the difference themselves, or opt for a Short Sale.

Before considering a Short Sale, you have to be prepared with the facts. Because the banks are so heavily involved in the sale, communication can sometimes happen at a snail’s pace. You should also consider that sometimes foreclosure is a possibility, and that properties are sometimes in disarray. If you are patient, and in no rush to move into your next home, a short sale may be a consideration for you.

 

What is a Foreclosure?

A foreclosure is when the bank seizes a property because the previous owners did not make their mortgage payments. Sometimes called REO properties, these homes are owned by the lender. These homes are usually sold “as-is”, and can sometimes, but not always, be in rough condition.

 

Can you tell me about Neighborhoods in Colorado Springs?

As a REALTOR®, there are rules about steering a home buyer into a specific neighborhoods or areas. What we can do is show you where you can find neighborhood information, crime statistics, economic information, and more. Just ask!

 

How are the Schools?

Again, real estate professionals cannot recommend specific schools. We can tell you where to get that information, though. One place to read school reviews, see test scores, and compare schools is a website called GreatSchools.

 

How much do Utilities cost?

This all depends on the home you wish to purchase. Buying a 100-year-old Victorian home downtown that has had few renovations will have a much higher utility bill than a similarly sized new-build. This is because newer building materials provide for better insulation. The same can be said for water bills when seeing  home with a yard full of grass and gardens versus one that has been xeroscaped.

The best way to determine utility costs for a property is to either obtain is from the homeowner, or from the local utility company who can provide averages over the last 12 months. In Colorado Springs, most properties use Colorado Springs Utilities for gas, electric, and water services.

 

How many homes should I look at before making an offer?

Don’t feel obligated to buy the first home you see. On the flip side of that coin, if you fall in love with the first home there’s no rule that says you need to continue your search. It’s all about your comfort level, and your gut feeling.

 

How much should I offer for the house I want?

You are the only person who can determine how much to offer for a house. It is always a good idea to ask your REALTOR® for advice, but in the end it is ultimately the buyer’s decision how much to offer.

 

What is Earnest Money?

In short, earnest money is when the buyer puts a good faith deposit on the home they are buying. This shows the seller that they are serious about buying the home. In general, these funds are held until closing and applied to the purchase of the home.

 

Do I need a Home Warranty?

While a Home Warranty is usually optional, it’s not a bad idea. By purchasing a home warranty, you are basically insuring your home against any unexpected surprises in the first year of home ownership. If the furnace breaks or your refrigerator stops working, the warranty will cover replacement of those items. Different warranties can cover different items in the home, and warranties are usually renewable year-to-year.

Some buyers ask that the Seller purchase a home warranty on the home as a contingency of the sale. Ask your REALTOR® about the pros and cons of asking the Seller for a home warranty, and for more information on what warranties can cover.

 

How long do I have to wait for the owners to respond to my offer?

Each purchase offer has a time limit within which the seller has to respond to the offer. The “life of the offer” usually lasts anywhere from 12 hours to a few days.  If you are making an offer on a newly listed home, it can be smart to put in a shorter offer life so that your offer gets approved before any new offers can roll in.

 

What if my offer is rejected?

When your offer is rejected, the seller generally either submits a counter offer, or simply rejects the offer with no further communication, or just ignores the offer. Don’t dismay! You can either accept the counter-offer, or just submit another offer that the seller may be more amenable to.

 

Can I require an inspection before I commit to buy a home?

Absolutely! In fact, we recommend it. The purchase offer you write when making an offer on the home can be contingent upon a home inspection, pest inspection, radon tests, chimney inspections, and more. While it’s ultimately up to you, we recommend that buyers require a general home inspection at the minimum to protect themselves from unexpected costs.

 

My offer was accepted…now what?

Once your offer is accepted, the wheels start turning to get everything completed before closing. Now is the time for the inspections to begin; financing to get locked in; and title, abstract, survey, and various miscellaneous paperwork to get submitted. You will be asked to provide information to the bank to complete the loan process, and your REALTOR® will ask for any signatures needed by you before closing.

If at any time you have questions about the closing process, your REALTOR® should be able to answer them, let you know where we are in the process. They will also communicate with you in a timely manner should there be any problems or hiccups along the way.

 

When is the closing date?

Typically, the transaction can be completed in about 30 days, but this is a target, not a guarantee. Sometimes unexpected issues arise, so it’s smart to keep yourself open to the idea that the closing date may change. We know you are eager to move, and do everything in our power to get the deal closed in a timely manner!

 

When do I get my keys?

The answer to this question is different depending on what state you are in. In Colorado, you can expect to get the keys to your new home at the closing table!