This is a very personal question that greatly depends on a person’s unique situation. Buying a home can be a great investment and gives you the opportunity to build equity, but it’s certainly not for everyone. There are certain factors to consider when deciding between renting and buying, such as current interest rates, the length of time you plan on living in the home, and the additional maintenance of owning a home. Interest rates are so low right now that it’s much cheaper to get a mortgage and owning may end up costing less than renting. But if you’re not completely in love with the neighborhood or aren’t sure how long you’ll be staying in the area, renting might be a better option. Also keep in mind the costs and responsibility of owning a home which can include time-consuming and expensive things like maintaining a yard or fixing any electrical or plumbing issues.
What does a real estate agent do?
The home buying process can be stressful and confusing, so a real estate agent can help walk you through the entire process and make it as smooth as possible. Statistics show that unrepresented buyers pay more for homes than those with buyer representation. But not all real estate agents are the same - be sure to ask lots of questions and make sure they have your best interests in mind! A good real estate agent can be one of your most valuable assets, representing you throughout the transaction and beyond.
How long does it take to buy a home?
The timeline for buying a home varies greatly from person to person and can depend on a diversity of factors, e.g. whether the home is a short sale. Depending on the state of the market, some people will search for years (hopefully not you!) and others for just a few days, but once you find a house and have an accepted offer, it usually takes around 30-45 days to close.
What is a foreclosure?
A foreclosure, often referred to as a bank-owned property or REO, is a property that is owned by a lender due to the previous owner’s failure to pay the mortgage debt. Most foreclosures are sold “as-is” meaning the buyer cannot make any request for repairs. Foreclosures are often much cheaper and usually purchased by investors or homeowners looking for a fixer-upper.
What other fees are there besides the down payment?
The largest payments besides the down payment are origination fees and closing costs. Most lenders charge between 2% to 5% of the loan amount in origination fees, depending on the loan type. Closing costs can include appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges. Although dependent upon each unique sale, you can assume closing costs to be around 2% of purchase price.
Who pays the Realtor fees when buying a home?
Agents who list homes represent sellers and charge a fee to represent them and market the property. Agents who represent buyers are compensated by the listing agent for bringing buyers to the table, so when a home is sold, the listing agent splits the listing fee with the buyer’s agent and buyers don’t have to pay any Realtor fees.
What is a short sale?
A short sale is the sale of a home where the proceeds aren’t enough to cover the balance of the debt against the property. A short sale must be approved by the lender (known for being notoriously slow) so the response time may be delayed. While short sale properties are usually less expensive, a buyer must be willing to be patient throughout the process and in no immediate rush to move.
How much do I need for a down payment?
Typically, 3% to 5% though most homeowners prefer to give larger down payments to decrease their monthly payments. Check out our list of loan types and down payment requirements here.
All of these terms confuse me. Where can I find easy-to-understand explanations for all of this?
We've got you covered. Head over to our commonly used terms right here!
Where should I live?
We thought you'd be asking this. Which is why we've made our 'Which Suburb Best Fits Your Personality?' quiz. Take it here.
I own a home. Should I sell it before buying another?
This is where a Compass Bridge Loan comes in, providing you a simple solution to bridge the gap between the home you have and the home you want. If you need to move but your money is tied up in the equity of your current house, a bridge loan can help you secure funding to facilitate the transition to a new home - like for a down payment or mortgage payments. When working with a Compass agent to sell your current home, you have the option to get up to six months of your loan payments fronted - an exclusive offering for Compass clients. That means you’ll have no out-of-pocket costs for the first six months of your bridge loan during your transition between homes. Once your current home sells, you’ll use the proceeds to pay the bridge loan back.
Are there special home buying programs I should know about?
Yes! There are various loan options, some of which we have listed here, but speak to a lender to find the program that best fits your situation. We can recommend a lender for you!
Brought to you by Brittany + Christa
We're not your typical real estate agents.As former city dwellers, we appreciate the qualities that make city lifestyle so unique, from the convenience of walking to your favorite restaurant or corner store to the vast and diverse cultural and entertainment activities. But we’ve also experienced the challenges and frustrations that are motivating you to seek change. During our transition from the city to the suburbs, we had the same thoughts, concerns and questions, prompting us to create a better way to navigate the suburban home buying journey for others.
The Riolo Team is a team of real estate brokers affiliated with Compass. Compass is a licensed real estate broker and abides by equal housing opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage.
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