The entire real estate process, whether you are buying or selling a house, can be rather complicated and confusing at times. Because real estate is such a massive financial investment, people often have many questions concerning the process and what they can expect. Fortunately, in the age of the internet, finding answers to your questions is as easy as a quick Google search.
However, not every answer is carefully vetted by real estate professionals. Therefore, here are the 10 most Googled real estate questions answered by real estate experts.
What type of home fits my budget?
When determining what type of home fits your budget, it’s a good idea to stick to the 28/36 rule, which states that you should not spend over 28 percent of your gross monthly income on housing costs nor over 36 percent on your total debts. For instance, if you earn around $5,000 per month and you have $500 in monthly debt payments, then your monthly mortgage payment for a house should be no more than $1,400.
Work with a mortgage lender to determine your pre-approval amount and to feel more confident moving forward with your property search, knowing you can focus on homes that comfortably fit within your budget.
Should I buy a newer or older property?
When deciding whether to buy a new or old home, there are many follow-up questions to ask yourself. Both options have their list of pros and cons. For instance, while you may face lower maintenance and repair costs with a newer home, these homes tend to be more expensive than older properties. More than anything, you need to consider your list of “must-haves” in a home and your overall budget when determining what type of house you should buy.
How much should my down payment be?
This is one of the top Googled real estate questions. Although it depends on your financial situation and budget, it is always a great idea to make a 20 percent down payment on your home. If you’re able to afford a 20 percent down payment, then you will reap certain benefits, such as avoiding private mortgage insurance (PMI) and paying a lower monthly payment on your mortgage.
How can I save money on my mortgage?
Since housing costs are typically the most significant part of anyone’s budget, reducing that cost is always a wise way to go. Fortunately, there are a few strategies for saving money on your mortgage. One of the best ways to save money on your mortgage is to make a down payment of at least 20 percent. If you pay less than 20 percent, then you’ll have to pay PMI on top of your payments.
Refinancing your mortgage is another excellent option for saving money. This entails taking out a new loan to pay off your outstanding balance. In most cases, refinancing should result in a lower monthly payment.
Should I buy in a seller’s market?
A seller’s market is simply a type of real estate market that favors home sellers. These markets are characterized by more buyers in a given area than available houses for sale. This leads to a higher level of competition between buyers.
While not ideal for home buyers, there are still tips and tricks you can utilize when faced with buying a house in a seller’s market. For instance, you’ll need to move much more quickly and make more aggressive offers to stand out against the competition. Additionally, hiring a trusted real estate agent will help you better navigate a seller’s market.
How do I determine my home’s market value?
There are several ways in which you can determine the market value of your home. In addition to utilizing an online valuation tool, you can ask your real estate agent to conduct a comparative market analysis to evaluate the recently sold prices of similar homes in your area. You could also hire a professional home appraiser.
Can I back out of a real estate contract?
This question varies by state and specific circumstances; however, generally, you can back out of a real estate contract in most cases. Typically, there will be a contingency period after signing a contract that allows the buyer to back out of the deal under certain circumstances, such as damages revealed during the inspection. Check your state’s real estate laws or with your agent to learn more about the contingency period.
Do I need to team up with an agent?
While you do not need a real estate agent to buy or sell a house, tackling the process without one could lead to complications and setbacks. Your agent is highly experienced at handling complex situations and overcoming obstacles with creative problem-solving solutions. If you do not have an experienced agent by your side, you will likely run into problems that you otherwise could have avoided. Additionally, only a real estate agent knows the tips and tricks to increase the value of your home or expertly negotiate for a better asking price.
How much is an agent’s commission?
In short, real estate agents are usually paid from the commission of a sale. While this percentage varies by agent and location, agents typically take a commission that ranges between 5 to 6 percent of the home’s sale price.
Is the housing market going to crash?
As of right now, it is improbable that the housing market will crash. Although current home prices have slightly trended downward throughout 2022 and into early 2023, the housing market remains relatively stable and consistently provides value over time, especially in highly desirable areas.
Getting started with an expert
While the answers to the most Googled real estate questions above should help you understand the world of real estate a little better, you most likely still have questions of your own. If that’s the case, then you need to contact a knowledgeable real estate agent before getting started on your journey.
Managing broker and expert Realtor Tim C. Miller has years of experience guiding his clients toward their goals in Whidbey Island real estate and beyond. With a specialty in 1031 exchanges, vacation homes, and VA purchases, Tim is ready to provide top-notch guidance. Reach out today.
*Header photo courtesy of Unsplash