Frequently Asked Questions for Buyers

Do I need to have 20% for a down-payment?

Growing up, many parents told their children that they had to have 20% for a down payment in order to buy a house.  With a variety of FHA and Conventional financing options, that is no longer the case. There are loans ranging from traditional 80/20 conventional loans all the way to some 100% financing options. Contact us for more information about loan types and a mortgage lender recommendation.

I want to be in my new house in 4 months, when should I begin looking?

Once you find a house and write an offer on it, it typically takes 30-45 days to complete everything before you can move in (assuming you need a loan to buy the home).  How long you need to actually find the home depends on what you’re looking for and what is available. Our question to you would be, “even if you feel like you’re six months out, if you found the home of your dreams tomorrow, would you be prepared to write an offer on it?”  If the answer is yes, then it’s time to begin looking now.  If the answer is no, then it’s best to have an initial consultation with us and we can begin sending you properties, but we don’t want to waste your time seriously looking until you are in a position where you are ready to buy.  You don’t want to find your dream home and not be able to buy it yet!

What is Earnest Money?

Earnest money is money paid by a buyer to show that you are making a serious offer to purchase a property.  While there is no law as to a minimum or maximum amount of earnest money required, typically 1% of the offer price is considered a good amount.  Earnest money is usually refundable if you back out of a property based on contingencies in the contract not being met.  However, the seller often times has the right to keep your earnest money if you decide to default on a contract in which all contingencies have been satisfied.  We will be able to better discuss the default process in a face-to-face meeting when going through the contract to make an offer on a home.

When I start visiting homes, what should I be looking for the first time through?

The house you ultimately choose to call home will play a major role in your life.  A home can be an excellent investment, of course, but more importantly, it should fit the way you really live, with spaces and features that appeal to everyone in your family. As you look at each home, pay close attention to these important areas:

  1. Is there enough room for you now, and in the near future?
  2. Is the home's floor plan right for your family?
  3. Is there enough storage space?
  4. Will you have to replace the appliances?
  5. Is the yard the size that you want?
  6. Are there enough bathrooms?
  7. How much maintenance and/or decorating will you need to do right away? Later?
  8. Will your present furniture work in this home?

Brainstorm some of these questions and others will surely arise.  The easiest way to find your dream home is to have at least a rough idea of what you want before you start looking.  An initial meeting with us will help you sort through the wants and needs of your home purchase.

Am I being realistic about finding what I want for how much I want to spend?

One of the first things that many buyers say to their agent is, "Tell me if I'm being unrealistic here."  Sometimes buyers are and sometimes they're not.  Obviously you want the best home you can find in the best location available, but you also have to put a limit on how much you are willing to pay.  Finding out and understanding this limit up front is critical.  This is why you need to talk to a lender before you begin seriously looking at homes.  Once you know your limit and, more importantly, your comfort zone, we will help you understand what is realistic for your price range.

How much negotiating power do I have on inspection related items?

First off, the main reason you hire an inspector is to find the $2000 items, not the $200 or $20 ones.  Depending upon the condition of the house, there may be both or neither present.  If repairs are needed, that is when you will begin your negotiations.  The joy about negotiations is that there aren't any set rules.  However, most sellers have guidelines that they go by.  For instance, it is usually acceptable to ask a seller to repair broken appliances or other malfunctioning systems or equipment, but it is not customary to ask a seller to upgrade something that is already in working order.  For instance, just because a water heater is old, if it works, the seller will most likely not replace it.  Keep in mind, many other factors have to do with what a seller will and will not do.  We will help you come up with a negotiating strategy to match the situation you are in.

What if something breaks in my home after I move in?

Home warranties offer you protection against many potentially expensive problems that not covered by your homeowner's insurance.  They've become increasingly popular in recent years, and for good reason: the coverage can save you thousands in the event of a major mechanical breakdown.  At a time when your cash reserves may have been depleted by your down payment and moving expenses, a warranty can be a life saver.  A one year home warranty can cost between $450 and $650, and sometimes you can ask the seller to purchase one for you as part of your negotiations.  They will typically cover everything from your heating and air systems and your plumbing, to existing appliances like your stove and washer/dryer.

Who does the real estate agent work for?

If I explained a complicated legal scenario to a group of attorneys and asked them how they would handle it, they would most likely respond with, "It depends...who is my client?"  The same goes for real estate agents.  Agency determines who your agent represents.

In Tennessee, most homes are sold with two separate agents - a listing agent and a buyer (or selling) agent.  When you sign an agreement with your agent, they should explain their agency status to you.  When listing your property, we will work as a Designated Agent for the Seller; in other words, Parks, the brokerage firm, designates us as your agent and we are required by law to work for your best interests before anyone else's and obey all lawful instructions from you.  The same goes if we are representing you in another transaction as a buyer.  We represent only you and not the other party in most instances.  We can discuss it in more detail when we meet with you in person for our initial consultation.