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Traci Shoberg

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Traci Shoberg
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traci@
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Frequently Asked Questions for Buyers

What Really Happens in the Home Buying Process?

 

What exactly is a buyer’s agent?

Do I pay you?

Why should I talk with a lender before you show me homes?

What is PITI?

Is there anything I should tell you before we start looking at homes?

Can I talk to the seller directly?

Can I contact the listing agent directly?

What is the proper etiquette when viewing a home?

Can I take pictures/video while in the home?

Can I still go to open houses even if I’m working with a buyer’s agent?

How do I know if I found “the one”?

What if I find a property I like, but I’m not ready to write?

What happens if there are multiple offers on a property?

What does ratified mean?

What is an Earnest Money Deposit (EMD)?

Can I cancel a contract?

Do I really need a home inspection?

What is an appraisal?

Why is my lender asking for so many documents?

How can I financially prepare for being approved for a mortgage?

How long does the home buying process take?

But my friend, who bought a home last year, said she didn't need to do that when she bought?

Can I tell everyone how excited I am about buying a home and being under contract on social media?

When can I move in?

How come this home buying process isn’t as easy as it is on TV?

What is a short sale?

What is a foreclosure?

What if I have a home to sell before I buy?

 

Didn't see your question? Send us a message and we'll get you an answer!

 

Answers:

What exactly is a buyer’s agent?

A buyer’s agent is someone who works exclusively with you during the process of searching for a home. We can let you into properties, help you search for ones that will meet your wants and needs, and write an offer. At that time, we will help you negotiate with the seller, get you through all the steps of the contract, and sit with you at the closing table when all is said and done. We keep your information confidential throughout the process and in return, will ask you to sign a Buyer Agency Agreement with us. This form is required by the state and ensures while we represent you, that we need to have you work exclusively with us.

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Do I pay you?

As your buyer’s agent, you do not pay us directly. We are paid through commission from the seller. This is an agreement the seller makes with their listing agent at the time of placing their home on the market and we are paid at closing.

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Why should I talk with a lender before you show me homes?

A lender will pre-qualify you to determine what type of loan you are eligible for and how much of a home you can afford. If you haven’t completed this step, we may waste time looking at homes you are unable to purchase. You can shop around for a lender. They can offer you different programs and different rates and obtaining a pre-qualification through one does not lock you in to working with them. If you do not know of a lender, we are happy to recommend some great local lenders to you. See our Vendor Directory.

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What is PITI?

This stands for Principal, Interest, Taxes, and Insurance. The sum of all 4 numbers will give you an estimate as to what your monthly payment will be on a house. Lenders will give you an estimate of your mortgage payments when pre-qualifying you for a loan. This is another reason to talk with them first before house hunting. If you want to stay at a specific payment, you need to know what loan, interest rate, and sales price you need in order to stick to that number. During this process, lenders will give you estimates of payments, but until your loan rate is locked in and you are ready for closing, your numbers may vary a little. 

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Is there anything I should tell you before we start looking at homes?

First and foremost, be honest with us about what is most important to you in a home (location, square footage, acreage, school district, upgrade potential, doorknobs…whatever it may be). We don’t want to waste your time showing you homes that you have no interest in living in.

Please tell us if you are allergic to any animals. Most of the time, we will be aware if there are animals in a home prior to our showing. Sometimes, we may be surprised though.

Also, let us know if there is anyone else who will be involved in the decision-making process. Even if you are the only name on the contract, if you have a parent, spouse, child, sibling, etc. whose opinion is very important to you, we will want them involved from the beginning.

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Can I talk to the seller directly?

No. No. And No. Sometimes innocent comments in conversation can end up hurting you in the negotiation process. If they ask you any questions, just say you prefer to communicate through your buyer’s agent.

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Can I contact the listing agent directly?

If you have a buyer’s agent, no. We are representing you as the buyer. Innocent conversation can end up hurting you in the negotiation process. Any questions you have for the other side will go through us. If you drive by a home with a for sale sign, tell us the address and we will get the information for you.

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What is the proper etiquette when viewing a home?

As a potential buyer of a home, you are welcome, and encouraged to, open cabinets and closets to see how much storage space you have. Do not look through personal property (i.e., dressers, free standing tv units and armoires, etc.), as this will be going when the sellers move out. If you need to use a restroom while looking at a home, ask first. Some properties have water turned off and this can cause problems if toilets are used.

Do not bad mouth the property while you are in the home or talk about what you may offer. It is best to act as if you are being recorded while in the home. Wait until we have left the property or are at the office to discuss any details.

If you know you must cancel the appointment, please tell us asap. Some sellers need to pack up kids and pets, run around doing a last minute clean up, and go out of their way to get out of their house for us. Please give as much notice as possible so we can notify them promptly.

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Can I take pictures/video while in the home?

No, not unless you ask ahead of time and we have permission from the seller. If you want to show family/friends the home you are looking at, send them an online link. Those photos are already approved by the seller to be shared. Sometimes sellers have areas or items they do not want photographed and shared, so please do not take your own.

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Can I still go to open houses even if I’m working with a buyer’s agent?

You can. Just let the agent at the home know you already have an agent working for you. Same goes for if you talk to a builder. However, we prefer you tell us your plans ahead of time so we can attend with you.

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How do I know if I found “the one”?

We can’t answer this for you. But bear in mind, some buyers fall in love with the very first home they see. Others, it takes several homes before they find “the one”. Don’t wait to see everything on the market if you found a great home you can see yourself in. If you do so, you may lose your chance and end up waiting on something that will never come. Also, keep in mind, there is no “perfect” home. No two homeowners live alike and have the exact same taste. It comes down to how much you are willing to take on to make changes/updates so it can become your “perfect” home.

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What if I find a property I like, but I’m not ready to write?

You can take as long as you want from viewing a home to deciding to write an offer on it. However, while you are thinking about it, someone else may be writing an offer, so you may lose your chance.

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What happens if there are multiple offers on a property?

When we know we are in competition with other offers (most listing agents will let us know), you will want to be sure to put in your highest and best offer (i.e., what is the most you are willing to pay for this home?). The number of contingencies you ask for on the property (inspections, appraisals, etc.) will factor in to the seller’s decision to choose yours or not, along with the price. If yours is not selected, it just means we keep on looking.

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What does ratified mean?

When you hear "we are ratified" that means the contract has been signed and initialed by all parties and all terms are agreed upon in order to move forward with the transaction. Until we are officially ratified, you can walk away from a contract without repercussions. Once ratified, we are now entering into a legally binding agreement.

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What is an Earnest Money Deposit (EMD)?

This is a check you write up front when submitting your offer that will be cashed in a third party account until closing. The seller will be assessing your level of commitment to purchasing the home and the quality of your financial situation. Your EMD is your way of showing them how committed you are to this home. Typically, the amount can be 1-3% of the purchase price offer or between $500-$1000, depending on the market conditions. If there is competition on the home (i.e., multiple offers), you may increase this amount to show how serious you are as a buyer. If the seller accepts your offer, the check is deposited and will be applied to your closing costs. If the seller does not accept your offer, the check is voided and you will write a new check for your next offer. This money is generally non-refundable when you go under contract. However, if you have contract contingencies (e.g., home inspection, appraisal, financing, etc), you do have the option of being released from the contract in some situations and retaining your deposit. 

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Can I cancel a contract?

Yes, you can, but you need to be aware of potential consequences. Contracts are legally binding agreements between two parties. Many contracts have contingencies written in to them, meaning if those contingencies are not met, you can be released from the contract and most often will be refunded your EMD. If you choose to walk away because you change your mind or default on your responsibilities in the contract, you could lose your EMD and possibly face other consequences from the seller. Depending on the circumstances to cancel, you may want to consult an attorney first.

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Do I really need a home inspection?

Home inspections are highly recommended. If your contract has a home inspection contingency, this will be scheduled soon (often within 2 weeks) after the ratified contract date. The exact time frame will be specified in your contract. You will want to attend this. Depending on the size of the home, this can typically last around 3 hours (maybe more, maybe less). The home inspector's job is to check out the property from top to bottom, but they can’t always see everything. They will point out the major systems, where they're located, and how they work. The inspector can identify issues that are glaring or are long-term maintenance concerns. You, the buyer, are responsible for the cost of the home inspection (est. $300-$500). This fee is non-refundable even if you release the contract. We can refer you to a licensed home inspector if you do not already know one.

Your will also have the option to complete a radon inspection at the time of your home inspection. It is a 48 hour test and will be completed in the lower level of the home. If the radon levels are too high, we will inform the seller and we may need to negotiate to rectify the problem. You, the buyer, are responsible for the cost of the radon inspection (est. $90-$150). For more information on radon, go to https://www.epa.gov/radon

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What is an appraisal?

All lenders require a bank appraisal, typically completed after the home inspection. You do not need to be present. You will receive a copy of the appraisal report after it is completed. If the property appraises at or above the sales price, we will continue to move forward towards settlement. If the property appraises below the sales price, we may need to go back to the negotiation table with the seller, or you will need to cover the difference. The appraiser may also request repairs be done to the home. These will need to be addressed before closing (through negotiations with the seller) and the appraiser will need to verify completion. You are responsible for the cost of the appraisal (varies by lender, but est. around $400-$600). This fee is non-refundable even if you release the contract. 

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Why is my lender asking for so many documents?

That is their job. To qualify for a loan, they need to know the ins and outs and every detail of your financial situation. Don’t try and hide anything from them because they will find out…honestly, they will. They ask for a lot from you, but it is for your benefit, so you can be in the home of your dreams. If you delay getting them what the need, you can end up delaying closing.

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How can I financially prepare for being approved for a mortgage?

Please see our Financial Mistakes for Buyers.

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How long does the home buying process take?

This can vary based on the loan, contingencies, and other unexpected things that may come into play. We have a closing date in the contract, but delays can happen. Cash closings can generally be quicker (30 days or less). If you need a mortgage, you may need more time, depending on the loan (in this market, typically 30-45 days). Issues with repairs, appraisals, etc. can cause delays and we may need to push back closing. Always have a plan B in mind if you are not able to close on time.

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But my friend, who bought a home last year, said she didn't have to go through all this when she bought?

The rules for buying and selling a home change regularly. If you know someone who bought a home 30 years ago or 30 days ago, chances are, your transaction will be different from theirs. Let the experts guide you 😊

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Can I tell everyone how excited I am about buying a home and being under contract on social media?

No. It is best to wait on sharing the news and your feelings about searching for homes, properties you’ve seen, contract status, etc. with the world until after closing. Things you post may be shared and could eventually be seen by the seller or listing agent. Just keep mum until you have keys in hand. Then feel free to shout it from the rooftop…of your new home 😊

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When can I move in?

In most contracts, keys are exchanged at closing. After the papers are signed, you can begin to move your belongings to your new home. There are some cases where you can move belongings or yourselves in prior to closing, but this needs to be agreed upon with the seller and it is NOT recommended.

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How come this home buying process isn’t as easy as it is on TV?

Because reality shows are mostly scripted.

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What is a short sale?

If you are in a hurry to buy a home, DO NOT consider a short sale. Contrary to its name, it is not a short process. It generally means the seller needs to sell the home, but will sell for less than what they owe on the property. You will first need the seller to accept an offer and then will need the bank to accept it too before moving forward under contract. Waiting on the bank to respond to the offer is what can take a long time (can be 60 or more days!). And even if the seller accepted your offer, the bank may reject or decline it.

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What is a foreclosure?

This is when the homeowner has defaulted on payments, so it is now owned by the bank or mortgage company. These generally can run on “typical” time frames, you just aren’t dealing with a person during the transaction. They often are sold in an as-is condition, so depending on the condition of the home, it may not be eligible for all loan options. 

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What if I have a home to sell before I buy?

If you need to sell your current home before you can purchase a new one, the process will be more complicated, but it is doable. When we list your home, we can write into the listing or contract from your buyer that the sale of your home is contingent on you having a predetermined amount of time to find and obtain a contract on a new home of your choosing. Once your current home and your newly selected home are both under contract, we will have a contingency on your new home contract of "coinciding settlements". This means that you cannot close on your purchase until you have officially closed on your sale. Both closings will likely be scheduled on the same date. Keep in mind, if your home sale goes through and there is an issue with your purchase, unless negotiations are agreed to with your home purchaser, you may have to follow through on selling your home even if  you are unable to buy your new home. Always make sure you have a plan B in place in case this were to happen.

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