Top Frequently Asked Questions (FAQs) in Real Estate
Is it necessary to put 20% down to buy a home? – No, the average first time homebuyer puts just 6% down, and certain loan programs allow as little as 3% or even zero down. We work with the best lenders who can give you great advice based on your personal financial situation and goals. I recommend speaking with a lender FIRST before we begin your home search. Trust me, it will save you a lot of time.
Do I need to do a Final Walkthrough? -YES! Once the seller moves out, it is important to check the home for any damage caused from furniture or mechanical malfunctions. There are HORROR stories of problems that come, and if you skip out on your final walkthrough, those problems become yours once you sign on the dotted line. Here are just a few examples:
Why is my market value different than my tax assessment? – The market value is the real value (aka what a Buyer is willing to pay for it). Assessed value is your tax basis which is irrelevant here. If you’d like to know the REAL value of your home, request a Comparative Market Analysis below.
How does the commission work? -The Seller pays the total commission to the listing brokerage, who then shares it with the selling brokerage. Typically it’s 50/50, but not always. Some selling brokerages (represent the buyer) charge ridiculous miscellaneous fees to their clients on the closing statement, but we never do that.
When is the best time to buy or sell? – Right now is the best time to buy AND sell. It’s the best time to buy because prices are going up quickly and will continue to go up, while interest rates are historically low. It’s a great time to sell because you will have equity in your home and you can sell on your terms. And yes, you can buy and sell at the same time, but it requires a very skilled agent.
How much are closing costs? -There are several factors that determine what the closing costs will be. It is not a “one size fits all”. However, in Florida if you are paying cash, your closing costs will be very low…usually around $1,000. But if you are financing, the typical homes closing cost is around $8,000 plus your down payment. It all depends on the type of loan that you get, how much you pay down your rate, how much the lender charges you for origination fee, whether you get a survey and appraisal, and how much insurance and taxes you pay in advance in escrow. The best place to get started is with a local lender.
Is it a Buyers Market or a Sellers Market? – There is no one size fits all answer for this question because it depends on which area we’re referring to, and it changes constantly. Right now in 2021 in Southwest Florida it is generally a Sellers Market, but not every single community and every single price point are experiencing this. The term refers to an equation, also called an absorption ratio, which measures the number of months of inventory presently. For example, if there are five homes for sale and there have been ten homes sold over the last 120 days, then we know that it will take approximately two months for the market to absorb the five active listings (given no new inventory comes on the market). Zero to three months is a Sellers Market, four to six months is an equilibrium market, and over six months of inventory is a Buyers Market. Right now in 2021 in most communities we have less than one month worth of inventory, and it is a very strong Sellers Market.
How soon can we close? -A good rule of thumb is to allow at least 2 weeks if you are buying with Cash, or 45 days if you are financing. However, with a good title company you can close in a matter of a couple days if paying cash. Time needed for a lender is up to that particular lender and it depends on the type of loan and the type of community. Sometimes an HOA will require at least 30 days to review applications.
Why are they selling?-Unless the Sellers Agent has willingly shared this information, that isn’t something a Buyers Agent would normally know. Some people may not want that information to get out, if it’s due to medical issues, divorce, or financial struggles. But if it is important for you to know, we will always ask. And we will do our due diligence to uncover any unstated reasons.
How long will the market stay like this? -No one can say with 100% certainty, however, the current trends are showing that this market is here to stay for a few more years.