Question #1: What is the first step in the homebuying process?
The first step is to partner with a local Realtor®. This is an important first step because your realtor is a local expert. They will be able to listen to all of your wants and needs and work with you to come up with a plan that suits you and your family best. Realtors® have very large networks and can get you in front of the right people to best assist you such as a financial advisor or lender. Upon partnering with a Realtor®, one of the first things they will have you do is sit down with a local lender to get pre-approved. If you do not know which lender to go with, your Realtor® will certainly have a list of a few different ones they work with you can choose from. During the pre-approval, you will discuss the financial side of things. The lender will run a preliminary check on your credit, income, and assets then discuss with you which loan programs would best fit your needs based on your unique situation. Doing a pre-approval at the beginning is very important because it will tell you exactly what you can afford before you start going shopping. This is crucial because it prevents you from wasting your time looking at homes outside of your budget. It is also crucial because you will need to have a pre-approval in order to make an offer on a home. In this insanely fast paced market we’re in, you do not want to be scrambling to get a pre-approval at the last minute- you could miss out on the home of your dreams!
Question #2: How much does it cost to work with a realtor?
There is a common misconception within the real estate industry where people think they will always have to come out of pocket to work with a Realtor®. This however is not always the case; if you are a homebuyer you will typically have to pay little to nothing at all to work with a Realtor®. It is pretty common for a Realtor® to charge a broker’s fee. The broker’s fee is usually at most just a few hundred dollars and it is typically paid at settlement- so you only pay if you close on a home (it’s built into your closing costs). Sellers are typically the ones that pay the Realtor’s® commission. This is because Realtors® are paid based on the sale of the home. They typically take around 6% of the sale price - 3% for the buyer's agent and 3% for the seller's agent (this percentage is negotiable). Say for example someone purchases a home for $300,000, the 6% commission is going to come out of that $300,000- the seller will receive $282,000 while the other $18,000 (6%) gets divided between the two Realtors®. So as a buyer you are not paying anything towards the Realtor® commissions, all you are doing is purchasing a home.
Question #3: How long does the process typically take?
The process varies for each individual or family because not everyone's situation is the same. Depending on your price range there might be more competition which could result in it taking longer to get an offer accepted. It also depends on the type of financing you are using. A cash deal can close in as little as a week or two after you go under contract on the home. Conventional, VA, FHA, and USDA loans can take anywhere from a few weeks to 60 days depending on the circumstances. In the current market, be prepared to look for a little longer prior to actually going under contract on a home. I would say on average, once you do go under contract, the process takes between 30-45 days.
If you are considering buying or selling but aren't sure where to start, reach out to me! I would love to help guide you and your loved ones on your journey to homeownership. Even if you aren’t ready I would still love to talk with you and help you to take the first steps in the right direction!
Call or Text me: 717-572-0629
Email: kyle@lancliving.com