Commonly Asked Buyer Questions

Should you have a question that isn't addressed here, we have provided you a question form at the bottom of this page. We will get back to you with an answer as soon as we can.

Commonly Asked Buyer Questions

Should you have a question that isn't addressed here, we have provided you a question form at the bottom of this page. We will get back to you with an answer as soon as we can.

A pre-approval letter is the first step in getting the ball rolling. Here are the reasons:

You need to know how much money you can borrow. Online home searches are more effective when you know how much home you can purchase with your funds. It will help you narrow down your options and avoid wasting time looking at homes over your budget. Pre-approvals can also prevent you from falling in love with unaffordable properties.

The second is the loan estimate provided by your lender. The loan estimate tells you how much money you need for closing costs and the down payment. Depending on your available funds, this may cause delays in the buying process while you save money, sell other assets, or get mortgage gift funds from your family. In any case, you will be able to see what the financial needs are.

Pre-approval for a mortgage is also a sign that you are a serious buyer to both the real estate broker and the seller. In most cases, sellers and their representatives don't consider an offer unless accompanied by a pre-approval letter.
A pre-approval is required, by most brokers, as a prerequisite to showing homes, especially luxury homes. Only pre-screened buyers will be allowed to view these homes, which keeps out "Looky Lous". Sellers gain protection from potential thieves by restricting who can enter their homes. Restricting access keeps would-be thieves from locating valuable artwork, identifying security systems and other personal property.

The average time to buy a home is between 10 and 12 weeks from when you decide to move forward. It considers the time it takes to select a lender and get pre-approved and the time to find a home and negotiate a contract. The average time to close escrow after choosing a home and negotiating a purchase contract is 30 to 45 days. Depending on whether the house is on a septic system, needed repairs, how long it takes to get an appraisal, etc., this time can vary. However, cash buyers are often able to buy properties much faster than this.


Market conditions play a significant role in the speed at which homes sell. Hot markets may have more sales activity than usual, so it is possible to take longer to buy a house. During bidding war markets, you may end up making offers on several homes before you are the winning bid. Also, many parties involved in the transaction fall behind when business picks up. A spike in home sales may increase property appraisals and inspection times because of the increased workload. The turnaround times of lenders for loan underwriting may also slow down. Assuming all parties agree, they can extend the closing date.

The rising demand for homes in sellers' markets drives up the prices. Here are some of the causes for a seller's market.

Economic factors - The local labor market increases, bringing in new residents and driving up home prices before building additional inventory.

Interest rates trending downward - improves home affordability, creating more buyer interest, particularly for first-time homebuyers who can afford bigger homes as the cost of money goes lower.

If the trend continues, buyers who are "on the fence" may be compelled to buy because of a short-term increase in interest rates. Buyers want to move before their purchasing power (the amount of money they can borrow) is reduced.

Low inventory means that there are fewer homes available due to a shortage of new construction. Because there are fewer homes available, prices for existing homes could rise.

Many sellers defer putting their homes on the market in times of uncertainty or health reasons, such as during the Covid 19 period.

A buyer's market is one that has declining home prices and lower demand. Many factors can affect buyer demand. For example, economic disruption - when a large employer closes down or lays off its workforce. Here are some of the main reasons for a buyer's market to occur.

Trending higher interest rates - The amount of money people can borrow to purchase a home lessens because it is more expensive, which reduces the number of buyers in the market. Buyers find better deals, and home prices fall to meet demand.

A temporary drop in interest rates can give borrowers a temporary advantage, allowing them more purchasing power until home prices react to recent changes.

High inventory in new home subdivisions can cause downward pressure on the prices of older homes, especially if they don't have desirable features (modern kitchens, etc.).

Natural disasters such as a recent earthquake, flooding, or other disruptions can cause property values to plummet in affected areas.

Costs involved in purchasing a home can vary significantly. In addition to lender and brokerage fees, there are numerous additional parties that must be paid including appraisers, inspectors, title companies, escrow companies, amoung others.


Some costs are allocated to the seller side, and others to the buyer side. We sell a lot of homes where, even though there are buyer costs involved, the out-of-pocket-costs to the buyer are zero as in the case of many VA buyer transactions.

A complete explanation of costs to buy a home can be found on the next tab, above, labeled Buyer Costs.

Most loan programs require FICO scores of 620 or higher. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower down payment requirement and better interest rate. Occasionally, especially with VA and FHA loans, lenders have approved loans with credit scores as low as 500! However, these are few and far between, and you need to know how to find them. Homebuyers with lower credit scores might need to contribute more money or accept a higher interest rate to offset the lender's risk.

Nationally, the average down payment is around 11%. However, the majority of first-time homebuyers only deposit 3% to 5%. The FHA loan is a long-standing favorite and requires 3.5% down. Some programs even allow family members to contribute down payment funds in the form of a gift.

Some programs require even less than 3%. While having more restrictions VA and USDA loans allow for zero down. Only former and current military service members are eligible for VA loans. USDA loans are available only to rural buyers with low-to-middle incomes in USDA-eligible areas.

A long time ago, conventional loans required a 20% down payment. Usually, buyers who had equity in their homes to help with down payments took out these loans. If the borrower has private mortgage insurance (PMI), some conventional loans are available with as little as 3% down.

In addition, there are programs for down payment assistance. Should you qualify for one of these, and the seller pays your closing costs, it's possible to purchase a home with little to no money out of pocket, even if you aren't eligible for a VA or USDA loan.

Selling your home will, typically, provide you with enough funds to purchase a new one. However, it is possible to buy a new home before selling your present home. If you have enough equity in your current home, you could take out a Home Equity Line of Credit (HELOC) to provide the funds for a down payment.

In some circumstances, depending on the equity in the home and your income, a Bridge Loan can provide temporary funds to purchase the next house while giving you some time to sell the first one.

Many homebuyers choose to make their home an investment property and rent it out. If you have a valid rental agreement in place, your lender will count a portion of the rent as income. Your loan advisor will still need information about your credit history and risk profile to determine if it's possible to purchase a home without selling the other one.

Many buyers have limited time to sell their homes when they move to another city due to job transfers. You may be moving to a new town but still working for the same employer. Check to see if the company offers relocation assistance to offset some of the cost.

Through technological advances, the home-buying process has changed dramatically. Before the days of opening up the inventory to the public through public search portals, buyers would sometimes physically look at dozens of homes. However, home shopping is now easier than ever. It is now possible to search for homes online and view photos, visual tours, 3D walk-throughs, drone photos, and even make an offer, all without ever leaving the comfort of your living space. The convenience of the internet is unparalleled. However, there is nothing better than visiting a home in person to experience how it feels.

In a seller's market, buyers tend to look at fewer homes because time is of the essence. In a buyer's market, they tend to look at more houses.

When you offer to buy a home, you will typically make a deposit known as earnest money, usually 1% to 2% of the purchase price. Earnest money proves to the seller that your offer is genuine. It is essentially a way to take the house off the market and keep it for yourself by telling the seller that you are a serious buyer. The more earnest money you put down, the more serious you appear.

For safekeeping, the earnest money goes into a trust or escrow account. The earnest money is then credited to you against the down payment and closing costs if the transaction closes. The money is returned to you if the deal falls apart, in most cases.

NOTE: Depending on how the transaction fails, you could lose your earnest money. Ask your broker for information about how to protect your earnest money deposit and what contingencies you can use to protect it.

Written offers should specify the response time by providing for an expiration date. Typically, it should not take more than twenty-four hours to respond. However, in multiple offer situations, the seller will sometimes specify a date for reviewing all offers. That date typically runs 3 to 7 days after the home is put on the market.

Sellers have the option to accept or reject an offer. However, there is a third option that sellers often choose. They can make a counter-offer. Remember: A deal isn't dead until it's over. If the seller makes a counter-offer, you are still in the game. You and your broker will need to go over the counter-offer and decide if it is acceptable. Approving the counter, in writing, clinches the deal immediately upon providing the seller's broker notice, in writing, that you have accepted their counter. Keep in mind, offers and counter-offers can go back and forth many times; this is not unusual, and negotiations are a part of what brokers do as a matter of routine. Each revision should bring the parties closer together regarding the terms of the deal.

NOTE: The seller may accept a different offer during the negotiations, even if they are negotiating with you. You don't have a deal until both sides agree to all terms of the transaction. Until then, either party may withdraw from the negotiations.

Home inspections can uncover hidden defects not easily identified without a professional inspection. Home inspections can provide peace of mind for one of your most significant investments. Some loan types require a professional home inspection. However, at this time, most do not. Some buyers will waive the inspection during strong seller's markets just so their offer is more competitive. Costly repairs may surface later. Also, some buyers will offer a pass/fail inspection. With this, the buyer will still have an inspection done but agrees not to ask for any repairs. It provides the buyer with the information needed to decide whether to walk away or move forward with the transaction.

Although it is not required, it is an excellent idea. Buyers have the opportunity to check that nothing has changed since their last visit. A follow-up visit is also highly recommended to ensure that any negotiated repairs were not only completed but done correctly.