Frequently Asked Questions
Most frequently asked questions when buying a HCA Home.
- Finding the Right Home
What should I consider before purchasing?
- Pricing
What is the difference between prices?
- First Offer
How much lower than list should my first offer be?
- Financing
Are there first time buyer discounts?
- Home Inspections
How can I find a home inspector?
- Closing Costs
Who pays closing costs?
- Why close through a title company?
1. Finding the Right Home
What should I consider before purchasing?
Even before starting to look at homes, find out what price house or condominium you can afford. In general, you can afford to buy a home equal in price to three times your gross annual income. More precisely, the price you can afford to pay for a home will depend on six factors:1. Your income; 2. The amount of cash you have available for the down payment, closing costs and cash reserves required by the lender; 3. Your outstanding debts;4. Your credit history; 5. The type of mortgage you select; and 6. Current interest rates. One of our HCA Realtors will be happy to assist you with this process. (back to top)
2. Pricing
What is the difference between prices?
A seller's advertised or list price should be treated as an estimate of what he or she would like to receive. Some sellers deliberately overprice, while others ask for close to what they hope to get, and a few actually underprice their houses with hopes that potential buyers will compete and overbid.
The appraisal price is another estimate of value. The appraised price is how much money a professional appraiser estimates the home to be worth and usually is based on comps, or sales of comparable homes in the same area.
Purchase price and sales price are the same thing. Both terms mean the amount of money the successful buyer actually pays to purchase the home. (back to top)
3. First Offer
How much lower than list should my first offer be?
We are frequently asked how much lower than the listed price should the buyer's first offer be? Who said the first offer has to be any lower than the listed price? If a property is listed / priced properly, it should be close to market value.
By making a drastically lower offer, you may be insulting the seller and limiting your chance of any further negotiations. A seller may be so enraged by an unrealistically low offer, that he refuses to see any additional offers from a prospect, or may make a counter offer back at a higher price than the original listing! This is particularly true if you ask for other concessions, such as the seller paying discount points, closing costs or including personal property in the sale.
If you've seen comparable properties with similar asking and selling prices, and you feel that the listed price is fair, put yourself in the seller's shoes before making an offer. Your first offer will set the stage for future negotiations -- positive or negative. (back to top)
4. Financing
Are there first time buyer discounts?
Numerous programs exist to help first time buyers purchase a home. A host of private lenders offer low-down payment loans. The U.S.Department of Housing and Urban Development offers a variety of programs through FHA that require approximately 3 to 5 percent cash down. Loan limits vary depending on the parish (county) where the property is located. Fannie Mae has a program allowing people to buy with just 3 percent down payments. For details, borrowers should contact lenders who offer government-insured loans. (back to top)
5. Home Inspections
How can I find a home inspector?
Contact the American Society of Home Inspectors; check your local yellow pages under "home inspection service". Make sure the inspector you select is accredited, licensed and insured. Don't be afraid to ask for references or a list of clients! Your areas assoc. of realtors may have a list or your HCA Realtor can provide you with a list of inspectors. (back to top)
6. Closing Costs
Who pays closing costs?
Closing costs vary from one transaction to another and can often total in the thousands of dollars. They may be paid up front or added to the buyer's loan balance. However, anxious sellers may sometimes offer to pay a portion or all of the costs to make a sale happen. Ultimately, closing costs are a negotiable item between the buyer and the seller.
Typically the seller pays sellers closing cost and the buyer pays buyers closing cost. Your HCA Realtor will give you an approximate of what your closing costs are going to be before you make an offer along with an approximate of your monthly payment will be if your offer is accepted. (back to top)
7. Title Company
Why Close through a Title Company?
Title Companies will provide you with Title Insurance, which customarily is paid by the Seller. Most lenders require mortgagee title insurance. This policy is security for their investment in real estate and insures there is a valid, enforceable lien on the property. This policy expires when the mortgage is paid in full. (back to top) |
