Buyer FAQ
Most commonly asked questions
Q. How many homes should I plan to view and how should I make the final decision?
A. An educated buyer is the best buyer. There isn't a magic number or homes that one should see before proceeding with an offer, however the more you see the easier it will become for you to recognize a good deal when you walk in. I've worked with people who've bought the first home they viewed and I've worked with others who walked through 20-30 properties before finding their home. As your Real Estate Professional I would like for you to see as many homes necessary to make you comfortable and assured you have found your dream home. This should not be a daunting task. It should be a fun and exciting endeavor.
Q. How can I check my credit rating before I apply for a mortgage?
A. The best thing to do is to arrange a time to sit down with a lender to determine what price you can qualify for. This process will involve the lender to pull your credit score to see how you rate. Your credit rating is based on a combined score generated from three credit bureaus. For a small fee, you can get your score or review your credit report by going online to www.myfico.com or contacting the credit bureaus directly at:
Equifax, www.equifax.com
Experian, www.experian.com, (888) 397-3742
TransUnion, www.transunion.com, (800) 916-8800
Q. Why should I consider paying points?
A. Buyers often choose to pay a one-time charge called mortgage "points" in exchange for a lower interest rate. Usually paid at closing, each "point" costs 1% of the mortgage amount, or $2,000 on a $200,000 loan. The lower rate reduces the monthly mortgage payment, and points paid in conjunction with the purchase of a home are generally tax-deductible in the year they're paid (see tax advisor). Monthly savings will often exceed what was paid in points in just a few years' time. When rates are as low as they have been in recent years, there is no need to pay points however this should be discussed in detail with a mortgage specialist. You may refer to the links in my web site for assistance in selecting a mortgage lender.
Q. What is the purpose of an attorney review?
A. Once you find the home of your dreams, there will most often be other buyers looking at the same home which would not allow you time to obtain an attorney and have your contract reviewed. Most attorneys prefer to review contracts signed by the seller and not offers. It is very likely the offer will change during the negotiating process which would mean the attorney would need to review the contract again. The review period gives the attorney the opportunity to review the contract once you have secured the home. He is free to change any items in the contract except for the price and dates you have agreed to. If agreement can not be made between your attorney and the seller's attorney then at your option, the contract can be cancelled and all earnest money would be returned. This is typical of standard language in most residential contracts in Illinois.
Q. What is title insurance and why do I need it?
A. Basically, title insurance assures that you have clear title to the home you're purchasing. The title search determines whether the seller actually owns the property and if there are any claims against it. This is usually associated with a small fee paid through you lender.
Q. What happens if the house I want to purchase does not appraise at the amount expected?
A. If the house doesn't appraise at the amount expected, other alternatives are typically found. A second appraisal may be sought, the buyer may be willing to put more money down, the seller may adjust the price or offer other concessions, or the two sides may negotiate to split the difference between them. In most cases, I will prepare a market analysis of the home before we make an offer, so we will have a pretty good idea of value before proceeding.
Inspections
Q. What is involved in a home inspection and is it necessary?"
A. While only certain inspections are required by mortgage lenders or government mandate, a comprehensive home inspection is considered a wise thing to do when purchasing a home. However, since it is not required, the buyer must pay for it. It is also recommended that at the time of the inspection, you accompany the home inspector so that you can learn firsthand as much as possible about the home you are about to purchase - including such basics as where the main water shut-off is and electrical distribution boxes are. Mortgage lenders typically require inspections for wood-destroying insects. Inspections mandated by the state or municipality could include an inspection done by the village to obtain a certificate of occupancy. This is a seller expense. All other inspections are generally paid for by the buyer and must be done within a specified time frame, as indicated in the contract
Q. What if the inspections turn up problems?
A. Few homes are perfect. Some problems may be a matter of simple cosmetics; others may be more serious and call for costly repairs. The good news, however, is that in most cases the seller and the buyer are able to come to terms. You and the seller may decide to compromise by sharing the costs of repairs, or the seller may pay for all or none of the repairs. You may ultimately decide that the issue is not important enough to risk losing the home.
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