Homebuying 101
Purchasing a home is one of life’s largest milestones, whether it’s your very first home or an upgrade to a larger space, it’s a big deal! That’s where a knowledgeable and experienced Realtor (and lender) come into play.
The first step in the homebuying process is to connect with a Realtor that you’re excited to work with. From there, a good real estate agent should be able to give you recommendations for local & reputable lenders – so don’t worry if you are not preapproved yet.
A good Realtor will advocate for you throughout the entire homebuying process, connect you with other incredible professionals (from lenders to home inspectors!), and educate and guide you from start to finish.
From day one we want our clients to feel comfortable, empowered, and supported on their homebuying journey.
Frequently asked questions
When is the best time to buy a home?
For the average residential homebuyer like us, “timing the market just right” is a unicorn and rarely happens.
The market ebbs and flows with the changing of the seasons here in the Midwest, and there are pros and cons to each season.
For example, the Spring market provides more inventory to choose from but the market is substantially more competitive. In Winter, there are fewer houses on the market, but there is also less competition (fewer folks want to move in the winter).
All in all, the best time to buy a home is when YOU are ready.
What are closing costs?
Closing costs are fees and expenses that come from originating a mortgage. You will pay closing costs the day you close on your house – they are an additional expense beyond the down payment. They include things like title insurance, appraisal, prepayment of homeowners insurance, property taxes, and more.
Closing costs are typically around 2%-3% of the purchase price. Your lender will be able to give you a more accurate estimate of your actual closing costs.
Do I need a 20% downpayment?
No, you typically do not need a 20% downpayment to buy a home.
With conventional loans, you can have as little as 3% down. FHA loans are similar and have better terms for folks with lower credit scores or high debt-to-income ratios. Keep in mind with less money down other things will arise with your monthly payment though, like Private Mortgage Insurance (PMI).
This is all the stuff you will talk to a lender about! A good lender will thoroughly discuss all of your options.
Do I pay my Realtor's commission?
If you are a homebuyer, typically, no.
Most of the time the Seller pays for both the listing agent’s commission and the buyer’s agent’s commission.
You will have to make note of broker administrative commissions. Most real estate brokerages have them and they typically range from $300-$1000 and go directly to your agent’s brokerage, not to the agent. Hamm Real Estate Co’s is $500 and gets wrapped into your closings costs.
What are other additional expenses to consider?
There are a few additional costs to consider besides your downpayment when buying a home.
Closing costs are your second biggest expense besides your downpayment. While we might be able to negotiate who will pay these, they will still have to be paid at the time of closing. They are typically around 2-3% of the purchase price.
Secondly, home inspections are always strongly encouraged! They start around $450 for a baseline inspection, and you can add some a la carte options like sewer scopes (~$225), radon tests(~$225), and more. Your Realtor will have a few great recommendations for all of these professionals.
Also, keep in mind any additional moving expenses, and some type of home emergency fund to be able to fix anything that might need repair while living in the home.
How do go about finding a good lender?
A good Realtor should have a circle of local, reputable lenders that they trust and have worked with extensively.
While you ultimately get to work with whomever you’d like, finding a lender that will help guide you through the process, be available after hours, and will communicate thoroughly, will make your homebuying experience much better and less stressful!
Plus, a local reputable lender can make all the difference when submitting an offer on a competitive home.
Kind words
“We cannot say enough good things about Mariah! They were incredibly informative, communicative, and open throughout the entire process. She really tuned into the type of homes we were looking for and helped us move things along quickly and efficiently. We love our new home!! Highly recommend!” – Zach G.