Your Real Estate Questions - Answered
Whether you are a first time home buyer, or selling your 5th home, every real estate transaction is a little different! No matter what the situation is, there are always some common questions that come up throughout the process.
Here are some of the most common questions that we address with our clients:
Do I need a 20% down payment to buy a house?
You do not necessarily need 20% down to buy a house! So if you have been renting and trying to save up that 20%, you may be surprised to find that you can get into your home sooner than you think and stop paying rent. It may be possible to qualify for a insured conventional loan with a minimum of 3% down, or you might be able to do a FHA loan with a minimum of 3.5% down. We recommend that you meet with a lender to discuss what the best option for you may be. Please reach out to us if you need a lender to talk to, we'd be happy to help you!
Is now a good time to buy/sell?
The honest truth to this question is that it is mostly about when you are personally ready for the next transition! The market can change every minute of every day, so most important thing is for you to determine what your goals are.
Of course, we are happy to sit down with you and help guide you in the right direction depending on where you are and what you want to do. Please feel free to reach out to us with your questions to help you get on the right path!
How do I know if I'm buying in a good neighborhood?
This is a pretty common question that we get from people all across the board. Whether you are looking in a new city, or you just aren't as familiar with the particular area, it is a fair question to wonder what the neighborhood is like. As licensed Realtors, we are actually unable to advise you on what crime rates are or really say if we think that a neighborhood is great, as it is subjective.
Instead, we recommend that you drive around a neighborhood of interest at a few different times of day - for example, evening, midday, and morning. Get a feel for the neighborhood at different times a day. You can also call the local police station and ask for crime statistics around a certain neighborhood. There are also a few website resources you can use that should be able to give you a general idea, however, calling the police station still may be the most accurate. One site we like to use can be found here.
Always remember that we can adjust your search if you find you are uncomfortable with a certain area, we just cannot make that determination for you.
Do I need to need to have a home inspection before I list my home?
Depending on what city you live in, you may be required to have a city inspector out prior to selling your home to make sure that it meets certain standard. For example, Minneapolis, St. Paul, and St. Louis Park, all require that you have this and you may be required to make certain repairs either before the home sale closes for the new buyers, or within a time frame immediately after closing. Keep in mind that a buyer will still likely have their own home inspection to address everything as well.
If you do not need live in a city that requires a separate inspection, you do not need to have an inspection prior to go on the home unless you would personally like one. It is still extremely likely that the buyer will still have their own inspection and depending on the length between inspections, different items may come up.
What is a radon test?
First of all, radon is an odorless and invisible gas that is emitted from soil that can cause damage to your lungs with long term or extreme exposure. The most extreme of exposure has been linked to lung cancer, that may lead to death.
The good news, is that there is a test and mitigation system that can be used to measure the radon exposure in a home, and if levels are high, a mitigation system can be installed.
If you have a home or are buying a home that does not have a mitigation system, it is extremely likely that a buyer will have a test to check the levels. There are at home tests, however, should a professional inspector preform the test, they will likely drop off a test in a home - usually the basement, and leave it for 48 hours to gather the levels. During this time, doors and windows should not be open for a prolonged period as it can affect the test results.
The EPA has determined the safety levels to be below 4.0 pCi/L. If levels are higher than this a buyer will most likely ask for a system to be installed and the seller usually covers this cost. For more information on radon you can visit the Minnesota Department of Health's website here.
What is an appraisal?
An appraisal is a home valuation done by a third party that is not a part of the transaction. The appraisal is ordered by a Lender once there is a contract in place, and generally after the home inspection is completed. The appraiser goes out to the home to assess and then uses other market comparable's to help determine it's value in comparison to the other homes that have sold within a recent history.
This can help protect the buyer from paying over the estimated market value for a home and helps protect the lender should anything happen with the mortgage. Should a home not appraise for the value that was agreed upon in the purchase agreement, it is common that the buyer and seller will renegotiate the price, or there may be a cancellation of the purchase agreement should the buyer or seller decide that they are not comfortable with the price.
Once this step is completed, it is usually a little more smooth sailing to closing.
What do I need to bring to the closing?
Congrats! You officially made it to the closing table! The biggest things to remember for closing whether you are a buyer or a seller are:
- Driver's License
- Personal checkbook
- Know your social security number
If you are a seller, make sure that you bring any keys from the home and/or garage door openers unless you leave all extras in the home.
If you are a buyer, you will want to make sure that you have submitted the wire for transfer of funds 24 hours prior to the closing.
If there is anything else needed, your Realtor, Title Company, or Lender will advise you prior to closing.
What are some of the other questions you have? Are you thinking about buying or selling in the next year or two? Reach out to us to help make a game plan for when the time is right.