Our Official Buyer FAQ

Our Official Buyer FAQ

Our Official Buyer FAQ
 
Buying your first home is an understandably daunting task. It’s likely the biggest purchase you’ll make in your entire life, and buying a home that doesn’t suit your needs is not a choice that can easily be undone. We’ve rounded up below the answers to the most frequently asked questions we get from homebuyers, and we hope you find it helpful!
 
 
Q: How much should I be spending on a home?
 
A: While building equity can put you in a great financial position further down the line, the costs upfront are quite considerable. What you should spend depends on your current level of debt, your area’s cost of living, your other investment activity, and whether the right home would reduce other expenses (for instance, a high-rise condo in the heart of the city would allow you to live a car-free lifestyle). Nonetheless, most experts recommend that your mortgage debt be no more than 28 percent of your gross monthly income. In addition to the mortgage payment, homeowners need to maintain a robust emergency fund for maintenance and other issues. However, mortgage interest and property taxes are deductible, and there are multiple state and local programs that can aid first-time homebuyers.
 
 
Q: What should I be looking for in an agent?
 
A: You want someone who is well-connected, responsive, and intimately familiar with your desired area. The ideal real estate agent knows how to use social media to not only market him or herself but to quickly pounce on a new listing and will take the time to get to know you and what you need. Don’t be afraid to shop around until you find an agent that you bond with.
 
 
Q: How many houses should I see before making an offer?
 
A: In general, it takes 1-3 months for condominium buyers to find their perfect home and about 3-6 months for those buying single-family homes. While there’s no definitive answer on how many houses you should see before picking one, it’s a good idea to tour at least three to five, and not to immediately fall in love with the first place that meets your criteria. Take ample notes on what you like and dislike about each place, and be sure to see your top choices more than once.
 
 
Q: What mortgage term length should I pick?
 
A: This will depend on your long-term financial goals. A 15-year mortgage will get you out of debt much quicker but will come with heftier payments that might leave you financially strained. Keep in mind that with a 30-year mortgage, you’ll pay over three times the interest to your bank than you would with a 15-year mortgage. However, if you’ve diversified your investments, then making small payments on a relatively lower-interest loan might be a financially-wise decision.
 
 
Q: How do I make sure there are no hidden problems with the house I picked?
 
A: Imagine closing on your dream home only to find out about a leaky roof or a dangerous radon problem, and having your new-homeowner honeymoon period be tainted by a lengthy and expensive legal battle. Don’t trust the seller’s inspector to tell you that the house is good to go—the savvy move is to hire your own inspector to look out for physical damage to the house, tax liens, or property disputes with neighbors. Even savvier is to hire an attorney to ensure that the terms of the transaction are clear.

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