There are many questions and unknowns about the world of real estate and there are even more misconceptions about these questions out there that make us wonder “what should I think?” Although a lot of these common questions can just state opinions, it is nice to see just some facts to help answer the question yourself about the home buying process.
The first questions I feel that I get asked all the time is: “I want to buy my first house, but where do I start?” Well, asking this of a real estate agent that you trust is step number one! For some, it may seem simple, but for first time home buyers, it is a genuine question, and the answer is: always getting prequalified with a lender you also trust! And if you do not have one, because hey, you have never had to talk to one before, then I have local, trusted lenders right in my back pocket I can give to. This lender is going to answer ALL those confusing lending questions like down payment, credit score needs, insurance, etc., etc., AKA: all the other questions a first-time home buyer is going to have about money!
Another common question is: “Is there a ‘best’ time of year to buy a home, price-wise?” Well, historically, the real estate market does wind down during fall/winter months and picks back up in the spring and summer months. However, as everyone has seen during the 2020 market, it was not that easy! Nevertheless, what they mean when they say “winds down,” is essentially fewer people are selling and buying during those time. This is due to many factors such as no one wants to haul furniture or travel when it’s cold and people are more focused on the holidays or school and the stresses that that all brings. This does not mean that prices drop, it just means you may have less buyer competition, or less options in terms of inventory to choose from.
The third most common question is: “What the heck are closing costs and how much is that going to be?” Well, closing costs are fees from the lender, appraiser, title, etc. They do work to help you get into a new house and they need to be paid, too! A good rule of thumb for closing cost amount is it will be roughly 3% of the purchase price of the home. So, if you put in an offer for a house and said you will pay $300,000 for the house and that you will pay you own closing costs, that would be $9,000 you would need OUTSIDE of your down payment. Sometimes people are confused about the difference between down payment and closing costs, and the confusion is justified! Chat with your lender about down payment options and ask the realtor about what closing costs are going to look like for this home. During a time when the market is not such a hot seller’s market, sometimes a buyer can ask sellers to pay for their closing costs, and then they don’t have to worry about it. However, stating the buyer will pay their own closing costs, does make the buyers offer a lot stronger if in a competitive market!
All these questions are mostly buyer related, however, they are great information to know for anyone who is in that time of their lives where they are thinking of purchasing a home and to stop paying someone else’s mortgage with rent! Have other questions related to real estate here in Cheyenne? Feel free to call me anytime and I would be happy to help!