B Lotz & Associates

Union City Buyer FAQ

What's the difference between a real estate agent and a real estate broker?

A real estate agent is an individual who has passed a test in the basic knowledge of real estate transactions and property sales laws. A real estate agent cannot work independently and must work though a broker or firm.

A real estate broker has a higher level of certification and training than an agent. A real estate broker may open a real estate firm or work for an existing one.

Purchasing a home vs renting?

With renting you will pay a periodic fee to stay on the property but you will never own the property. Purchasing allows you to own the home and do with it what you wish. Also, if the property value increases and you own the home, you will be able to sell the property for a profit.

How do I figure out what mortgage I can afford?

This is something to discuss with your real estate agent and your mortgage lender. To have a general idea of what you can afford follow this equation: take your monthly pretax income and multiply it by 0.36 (this is roughly the amount of money you should have each month for payments). Then take that number and subtract your monthly debt cost (car payments, student loan, etc.). The number you end up with is a rough estimate on how much you can pay each month towards your mortgage.

Why should I hire a real estate agent?

A real estate agent can help you find a home quicker than you can on your own but that is not the only reason they are needed. They have knowledge of the neighborhoods in your city and can tell you what area would best suit your life style. They will know of the current market conditions and how to use it to their advantage when negotiating price with the seller.

What does a real estate agent do?

With buyers being able to search properties quickly over the internet it is often asked, "why do I need a real estate agent"?

After a consultation an agent will know what you are looking for and how to narrow down your search (which areas have good school districts, lower taxes, easy commutes, etc.). Agents have experience not only in understanding real estate law but also in how to negotiate. Their advice will stream line the entire process including how to tackle all the documentation you must sift through. Most importantly, an agent will protect the buyer's interests during the closing of the deal.

What is a 48 hour clause?

A 48 hour clause is just a simple way to protect the interests of both the buyer and seller of a piece of real estate. A buyer may ask for a 48 hour clause if they want to make an offer on a house with the condition that they sell their own home first before they can purchase the new one. If the seller accepts this condition, a 48 hour clause may be inserted into the contract that says if the seller gets a better offer while waiting for the original buyer to sell their home, they can give the original buyer 48 hours' notice that they will be accepting the new offer if the original buyer does not follow through on the purchase. This clause basically means that a buyer can make an offer on a house they can't yet afford, and if the seller agrees to wait for the buyer, they can get out of the contract with 48 hours' notice when a better offer comes along.

The notice period is not always 48 hours. 24 hour and 72 hour notices are also common.

What if my offer is rejected?

It is normal for the first offer to be rejected in a real estate purchase. This is not a reason to give up hope but rather it is a reason to start negotiations. An experienced agent will help guide you through the negotiation process. The price will almost certainly be raised from the original offer but there are also additional features the buyer may ask for. For instance, a buyer could negotiate that seller pay for some or all of the closing costs or certain repairs.

How much should I offer?

This is a question your agent will help you with as the answer is specific to the property. However, some factors that must be considered are:

  • Is the house in good condition?
  • Will you need to make renovations for it to suit your needs?
  • How long has it been on the market?
  • Is the asking price comparable to other similar homes in the area?

What should I look for when walking through a home?

It is recommended that you have a home inspector examine the property but here are some tips on what to look for during your first time viewing a home.

Good foundations are extremely important in purchasing a home. If you have access to the basement then check the walls for cracks. Cracks in the foundation happen naturally as the house settles but you should look for vertical cracks and ones that are larger at one end than the other. Next when you are on the top floor check the doors and windows to see if they open and close easily. If a foundation has shifted then the top floor will have moved the most.

Water damage is very important to check. Inspect ceilings on every floor for discoloration or bubbles in paint. Check the basement for any discoloration in the concrete around cracks and look to see if you can find signs of mold and mildew. When outside the house look at the eaves as they are responsible from moving rain water away from the foundation.

Don't forget to check every faucet, toilet and showerhead to see that the plumbing works well.

What questions should I ask when buying a home?

We will help you ask the right questions but here is a quick overview of some of the important questions to ask:

  • How much did the seller pay?
  • How much does the seller still owe?
  • How much do similar homes go for in the area?
  • How long has it been on the market?
  • How old is the roof?
  • What type of insulation does it have?
  • Does the attic have insulation?
  • What is the type of foundation?

Should I hire a home inspector before purchasing?

It is always a good idea to have an inspector see the home. If you opt to not have an inspector then you run the risk of buying a house which will eventually require expensive repairs.

How do I make an offer?

Remember that the most important thing is to make an offer that you can afford. Once you have your eye on a house which is right for you we will take you through the process of submitting your offer to the seller.

What are home warranties?

Not to be confused with homeowners insurance which covers perilous damage like fire and property crimes, home warranties cover components in the home. The contract will disclose exactly what the home warranty company will cover but often the company provides discounted repair or replacement on things like furnaces, HVAC systems, electrical systems and plumbing systems.

It is always a good idea to check the reviews on any company you do business with.

How are pre-qualifying and pre-approval different?

Pre-qualified: the initial step in the mortgage progress, a lender or bank will calculate the general mortgage amount you qualify for. This is done by evaluating your debt, income and assets.

Pre-approval This comes after pre-qualification. You will make an official application for a mortgage and the lender will perform an extensive check of your financial background and current credit rating. After which the lender will tell you the amount you have been approved for.

The main benefits of obtaining pre-qualified and pre-approval are 1) knowing exactly how much you can spend on a home so you do not waste your time looking at homes beyond your means. 2) This makes you more appealing to a seller as you are closer to having an actual mortgage.

What should I think about when deciding which community to live in?

It is important to understand what you have planned for your future. If you are raising (or planning on raising) a family then you may wish to find a community with a high percentage of new families with child friendly activity centers (municipal pools, parks, etc.). Every area has its own school district. If you have a specific school in mind then you will need to figure out which homes are within said district.

Whether you are planning to start a family or not, there are other factors which are just as important to consider. For many people, proximity to friends and family must be considered as well as the length of the commute to work. If you do not own a vehicle then you will also need to consider public transportation options.

Don't forget about food. Traveling to a supermarket or a restaurant costs both time and money so having it close at hand will save you money in the long run.

When you talk with your real estate agent mention your future plans and they will factor those into your buying options.

Should I hire a lawyer to make sure buying a property goes smoothly?

In certain states hiring a lawyer is mandatory (Alabama, Delaware, Georgia, New York, North Carolina, South Carolina and Massachusetts). Regardless of where you live it is good idea to hire a real estate attorney as an advisor since this will most probably be the largest purchase you will make in your lifetime.