Frequently Asked Real Estate Questions
My name is Dora Marrero and I am a licensed Realtor®.
What about economic recovery and the mortgage refinancing programs?
Where can I learn about Mortgages and calculate my payments?
What happens in a Real Estate Transaction? (AdobeReader Required)
Where can I learn about buying, owning, selling, and financing a home?
Where can I learn about the Christian Community in Central Florida?
Where can I learn about MOLD, humidity and my home?
What is a Competitive Market Analysis (CMA)?
What is Multiple Listing Service (MLS)?
What is a Buyer's Agency Agreement?
What is the difference between a loan and a mortgage?
What is a pre-approval letter?
Who pays for a home inspection?
How much money do you put down on a house?
What are the differences between mortgage pre-qualification, pre-approval and final loan approval?
Who pays for closing costs? And, just how much are closing costs?
Should I spend the money to have a home inspection?
I want to buy a home, where do I start?
When I find the house I want to buy, how do I know how much to offer?
What is homeowner's insurance? Do I need to buy it?
My lender said that I need to have an escrow account. What is that?
What is a Survey? Do I need to get one?
ANSWERS:
What is a Competitive Market Analysis (CMA)?
The most reliable indicator of a home's value is what similar homes sold for in the past. A CMA is a comparison of the prices of recently sold homes that are similar to the "subject home" in terms of location, style, condition and amenities.
What is Multiple Listing Service (MLS)?
MLS is a computer database for Realtors in a metro area. The database is compiled of detailed information on homes both for sale, under contract and sold. This is a tool Realtors use to produce a CMA, search for properties that a buyer is looking for, and to market their listings to other Realtors.
What is a Buyer's Agency Agreement?
A Buyer's Agency Agreement is a document signed by the agent and buyer. It represents a principal-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer. The broker represents the buyer under the law of agency.
When a Broker is representing both the Buyer and a Seller of real property. The broker is not acting in a "designated" agency capacity.
What is the difference between a loan and a mortgage?
A loan is a sum of borrowed money that is generally repaid with interest. A mortgage is a conditional transfer or pledge of real estate as security for the payment of a debt. Also, it is the document creating a mortgage lien.
What is a pre-approval letter?
It is a letter from a lending source stating that based on the information regarding income, credit, job history etc. that you provided to them, that you will be able to obtain a loan with terms stated in the letter.
The seller pays the Realtor's commission. Generally, the agent who lists the house "for sale" and the agent who "procures the buyer," split the commission. The commission is paid at closing and taken out of the seller's proceeds.
Who pays for a home inspection?
The buyer hires and pays for an inspector.
Money deposited by a buyer under the terms of a contract, as good faith money, to be forfeited if the buyer defaults according to the contract terms, but applied to the purchase price if the sale is closed.
How much money do you put down on a house?
There are 100% finance options available now, so some buyers (who are eligible for these types of loans) do not need any money to put down. Most buyers however, put down 5-20% of the purchase price. There are so many "creative financing" options out there, that it is best to talk to your lender openly about your personal situation so they can find appropriate financing for your needs. Also, by putting at least 20% down, the buyer avoids mortgage insurance, which can save you a considerable amount on your monthly payment and over the course of the loan.
What are the differences between mortgage pre-qualification, pre-approval and final loan approval?
Pre-qualification is when the lender will look at a basic copy of your credit report and use the information you supply to determine how much of a mortgage payment you can afford based on your income. No accounts or employment information is verified. Pre-approval is subject to the appraisal of the property you have chosen to buy. Your credit information and accounts are verified. Final loan approval occurs when the property has been appraised, all documentation requested from the lender has been received, and all contingencies have been met.
After you are pre-qualified, do you need to do anything else with your lender prior to making an offer on a house?
No, but after the offer is accepted it imperative that you follow through with a lender and make formal "loan application" with a lender according to the terms of the contract. Then you will need to provide specific documents, depending upon the loan type that is chosen for you.
Closing costs are the miscellaneous expenses that are incurred during the loan process.
How many different fees are included in "closing costs"?
You may see these on the closing statement and your "good faith estimate":
Appraisal Fee, Credit Report Fee, Document Processing Fee, Loan Document Viewer, Flood Certification Processing Fee, Lender Underwriting Fee, Tax Service Processing Fee, Wire Processing fee, Title Insurance, Title Exam Fees, Recording Fees, Attorney Fees, and Transfer Taxes.
Who pays for closing costs? And, just how much are closing costs?
The party who pays for closing costs is negotiable in the contract, but it is assumed that the buyer will pay for them unless it is negotiated in the contract for the seller to pay or help with a portion of them. The total costs could vary, but a good estimate is 2.8% of the loan amount. Ask your lender to be sure!
I am looking at new subdivisions, and at some other resales in the area, the agents are really nice, do I still need my own agent?
First of all, in virtually all situations, the buyer does not pay a commission, so the services of an Agent working for you are paid for by the seller. Generally, agents on site represent the seller (builder) and not the buyer. Without an agent working for you, you maybe missing valuable information regarding the transaction and you may be missing representation of your interests.
Should I spend the money to have a home inspection?
Yes! New or resale! The $250-$300 for a professional home inspection cost could be the best money ever spent on a house. Not only does the home inspector seek out any defects of the home, the inspector will often give you tips on maintaining and repairing your house. The best thing of all is the peace of mind of being informed.
An appraisal is an opinion of the value of the home you want to purchase. Virtually every lender will need an appraisal before the loan is approved.
I want to buy a home, where do I start?
1. Find an Agent that you can trust. It is important to do this before you go rushing off looking for homes or you may end up with no representation. A reputable Realtor can recommend lenders, inspectors and can answer many questions for you throughout the buying process.
2. Familiarize yourself with the mortgage process, pre-qualify with a lender, get your financial picture in focus, determine your budget. Now is not the time to buy a new car and open up lines of credit!
3. Determine your housing needs, wants, and location, consider all of the various housing types, condo, single-family, and high-rise. Make an appointment with your Realtor to start looking.
It is a questionnaire that the seller fills out that gives the buyer the history of the home.
When I find the house I want to buy, how do I know how much to offer?
The most reliable indicator of a home's value is what similar home's sold for in the past. Ask your Realtor to do a CMA of the neighborhood in where you are considering purchasing. You can take a look at various factors of the home and decide with your Realtor's knowledge and the information you gathered. These factors may include location, condition, recent sales, competition, and other special circumstances such as a sale due to a divorce, corporate transfer, pre-foreclosure, or estate sale?
What is homeowner's insurance? Do I need to buy it?
It is an insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents. You are generally required to bring a pre-paid policy to your closing to cover your new dwelling.
A loan insured by the Federal Housing Administration (of the Housing and Urban Development.) Note: There are certain loan limits. Check with your lender on the guidelines.
A mortgage loan not insured by the Federal Housing administration or guaranteed by the Veterans Administration. In other words no governmental agency approval is required for the lender, borrower, or property.
My lender said that I need to have an escrow account. What is that?
An account held by the lender to which the borrower makes monthly installments for property taxes, insurance and special assessments, and from which the lender disburses these sums when they become due.
What is a Survey? Do I need to get one?
A survey is measurement of land, prepared by a registered land surveyor. It is quite useful to have and generally recommended to have so you know where your lot boundaries are. Most lenders do not require you to have a survey prior to closing on the loan of your home. Be sure to ask your lender if a survey is required and ask your Realtor if one is available on the property (from the seller).