Home buyers common questions and answers, FAQ's

Home Buyers Common Questions

Frequently Asked Questions and Answers from Home Buyers

Buying a home can feel overwhelming at times, especially if you are unsure of the process or have unanswered questions along the way. Even people who have bought a few homes over the years forget steps in the process, or the order in which all of the steps take place. Many questions that come up are simply explaining some of the most common real estate terms .


Here is a list of some of the most commonly asked questions we get from Utah home buyers.  We want you to be well educated and properly prepared for the process. With that in mind, I would encourage you to read my booklet entitled: The Utah Home Buyers Guide. You can download your free copy by clicking here.


These are just a few of the most frequently asked questions from Utah home buyers. Remember the old “no question is a dumb question.”  If you’re unsure of something when buying a home, ask!


Should I talk with a lender before looking at homes?

Yes! There are so many of reasons why you should talk with a good lender and get pre-approved before you go looking at homes.  First and foremost, talking with a bank before looking at homes can help you understand exactly how much you can afford.  There is no reason to look at homes that are listed for $350,000 if you can only afford up to $300,000. 


There are many first-time home buyer programs available, so If you’re a first time home buyer, talking with a bank before looking at homes is strongly suggested.  These programs can vary from state to state and county to county, so knowing exactly what’s available to you, is critical.


Another important reason to talk with a bank before looking at homes is so you understand exactly what costs are associated with buying a home. There are many home buyers who don’t understand the difference between a down payment, pre-paid items, and escrows, which can be thoroughly explained by a lender. 


Your real estate agent is not a lender and should not be giving lending advice.  Just as people who are not Realtors should not give you real estate advice… Your real estate agent is not a lender and should not be giving lending advice. Please talk to a qualified professional who will guide you and look out for your best interests. 



Should I buy or continue to rent?

While buying a home is widely looked at as one of the best investments you can make, it’s not for everyone. Renting, at least short-term, can be a better option for some. Three important factors make home ownership much more appealing than renting: 

1. Interest rates have been at historic lows, which can make a house payment even lower than a rent payment. 

2. Rental rates and home values are on the rise, which makes buying now a logical choice and a good investment.

3. Renters don’t get any tax breaks, but for most, the interest you pay on a your primary residence, is one of the biggest tax breaks out there.


There are many things to consider including, how long do you want to stay in a particular city, and what type of property is right for me. Talking with a good real estate agent who is experienced and knows the area well is a good, no obligation, first step though.



Are there rent-to-own homes available?

Sure, but not very many, and they are often not the best option. Renting to own sounds good, but it can come with a whole series of potential pitfalls that can cost you a lot of money. For example; when an seller is offering “rent-to-own” as a financing option, the terms for a rent-to-own will be in favor of the owner, since he is taking on more risk with a buyer who does not qualify for a regular home loan. This leads to less than favorable terms for a buyer.  When doing a rent-to-own you can expect to provide a considerable amount of money down and pay a higher interest rate than with a traditional lender. So, if you can finance a home with a bank or Credit Union, you usually be better off and have less risk.



I already own a home, should I buy another before selling my current home?

This is a great question, and the answer is…it depends.  There are pro’s and con’s to buying a home before selling your current home and the same can be said about selling your current home before buying another. The best I can tell you here is…consult with a good real estate agent. They will need to talk to you about your needs and your exact situation, not to mention the current market conditions that you are in at the time. You will need to know what to expect and a good sense of the timeframe involved so you can make a decision that is best for you. A good real estate agent can help walk-you through the process and help you make the decision; but here are a few things to consider:

Buying a home before selling your current home

It’s great when you find a home you love and really want, but if you have to sell your home in order to buy it, then it can be problematic if you don’t have a really good real estate agent helping make it all happen. Most sellers will not accept that kind of contingency, and if they do, they will usually bump you out of the deal if they get another offer from a buyer who does not have to sell a home in order to buy theirs. This can lead to a big heartbreak and a loss of a lot of time and money. This does not have to be the case however…If you have an experienced agent, they will be able to write the contract in such a way as to protect you and give you a better chance at making this all work-out. They will be used to dealing with contingent offers and know exactly what to say and how to negotiate the contract to protect you. Plus a good agent will get your house marketed properly and get it under-contract quickly, so the other seller won’t be able to bump you from the transaction. I am speaking in some general terms here, but you get the idea. Hire a professional and experienced agent to represent you as a buyers agent…besides buyers agents are free to home buyers, so why not use the services of a very experienced one who will help give you every advantage possible. I recommend reading my booklet called: The Utah Home Buyers Guide. You can download a free copy now by clicking here.

Selling your current home before buying a new home

Most agents will tell you that the time it takes to sell your current home is unpredictable.  This is non-sense. If you hire an experienced Sellers Specialist to help you sell your home, it is very predictable. I am speaking from 28 years of experience here. As a Sellers Specialist, I know with 95 percent certainty, within 15 minutes of walking into a home, exactly what needs to be done, how long it will take to get it sold and closed, what price to market the home, and what we are going to get the home sold for. How do I know this?  My experience and my systems.  Like other top agents around the country, I have my systems in place and the experience to know exactly what to do and how to do it, to get great results every time.  So selling your current home before buying a new home will put you in an ideal position to negotiate on the new home you’re purchasing due to the fact you are purchasing without the sale contingency of your current home. Also by putting your home on the market and getting it under contract, and then going and looking at homes, you are making an offer to purchase with your home already under contract. Sellers are much more receptive to this situation and more eager to try to make a deal.


One risk of selling your current home first is the chance of not finding a great home to purchase and close when your home closes. There are some options if your current home sells before buying another though.  One option is a “rent-back”. A rent-back can often be negotiated with the buyer of your current home to allow you to retain possession of your current home for a period after closing. A “rent-back” would give you additional time to find a new home. Another option is negotiating into your sale, a contingency, that states that the sale of your home is contingent on your finding another home to purchase. There are many other options available and a good “sellers specialist” will be able to help and advise you every step of the way.



Do I really need a Real Estate Agent when buying a home?

Nope. You can buy a home without a realtor, but just like you can drive a car with your feet, that doesn’t mean it’s a good idea.


Why would you want to take one of the most important purchases in your life and try to do it on your own? Most people think they can save money if they don’t use a real estate agent; not knowing that there are great real estate agents who don’t charge buyers any commission…they just take a commission from the listing agent. This is part of the agreement between agents in the MLS system and it is designed to give home buyers the free agents. The Board of Realtors wants home buyers to have representation and so this is all built into the system. Buyers do not pay commission and really should have representation when they are buying a home. 


You can learn much more about this and so many other home buying strategies in my free booklet called: The Utah Home Buyers Guide.



Who pays the agent fees when buying a home?

Agent fees are almost always paid for by the seller and negotiated at the time of the listing agreement. The same goes for “New Construction”; the seller or home builder pays the fees, and the buyer should always have their own representation. For more on this read my booklets: The Utah Home Buyers Guide, and the New Construction Booklet. They are free and have so many helpful insights. 



How is the neighborhood/area?

A common question home buyers have is regarding the neighborhood/area. How is this area, they ask? Or “only show me homes in good areas”.  As a real estate agent, there are rules against steering people to or away from specific areas and neighborhoods.  This doesn’t mean that your Realtor cannot provide you with tips to help you choose the right neighborhood when buying a home.  


Many buyers wonder about the growth of the local economy, crime statistics, taxes, and local amenities.  If you have a good agent helping you when buying a home, you should be able to receive all of the pertinent information to allow you to make an educated decision on areas and neighborhoods. I suggest driving around and getting to know the areas and neighborhoods especially when you find a home you think you might be interested in. It’s also a good idea to talk to neighbors in the area of a home you are interested in, to see what they have to say.



How are the schools?

How are the schools in this area? That’s another question we often get as agents. There is no doubt that schools impact property values.  Just like tips for selecting a neighborhoods, a good agent should be able to provide you with names or websites where you can find information on the local schools so that you can determine whether or not the schools are acceptable to you or not. 



What is a short sale?

Short sales are when a homeowner wants to sell their home but they owe more than the market will bear at the time, so the owner asks the bank to take less than what is owed on the home. 


Banks do not have to agree to do this, in fact, depending on the market conditions, they won’t agree and it can be a lot of wasted time for a buyer. Another common issue with Short Sales is in many cases, while the owners and potential buyers think the lender is going through the short sale approval process, the foreclosure department is moving forward with a foreclosure that can kill the whole deal.  If the lender agrees to sell short, it can be a way for an upside down seller to sell a home instead of going through a foreclosure, but there are many hurdles and challenges along the way. 


If you are interested in learning all the ins and outs of Short Sales, contact me and ask me to send you more information on the subject. I am writing a new booklet on Short Sales and Foreclosures, and I would be happy sending you an early draft. 



What is a foreclosure?

Foreclosures can actually be a smoother transaction than a short sale for most buyers.  A foreclosure, often referred to as a REO, is a property that is owned by a lender.  If you’re considering the purchase of a foreclosure, it’s important to understand that most are sold “as-is.”  Foreclosures, if not purchased by an owner occupant, are often purchased by investors, fixed up, “flipped,” and sold to a owner occupant. Buying a foreclosure has its own unique set of pro’s and con’s, and again, if you contact me I will send you more information to help you.



What are the average utility bills?

Utility bills can vary widely from house to house, and can be important to many buyers when comparing homes. Utility bills can be obtained from the home owner and in some cases, from the local utility company, who can provide averages over the past 12 months.  Keep in mind, everyone prefers to have their home temperature different, so the average bill could be different if you were to purchase the home.



What’s the age of the furnace, AC, water heater, roof, etc…

Most buyers want to know the ages of specific items in a home.  The most popular items in a home that buyers want to know about are the major mechanical items, such as the roof, furnace, water heater, and air conditioning.  An experienced agent should be able to find the dates of a furnace, water heater, and air conditioning unit by looking at the serial numbers.  The roof age is often known by the home owner.  If not, the age usually can be approximately determined by looking at the roof characteristics, such as the sagging areas and the way the shingles are laying. The details of all the important items in a home can be determined during the buyers due diligence period, or inspection period.



How much should I offer the sellers?

This is a buyer’s choice. So much of what goes into this decision is based on factors such as; how badly do what this house?, how many offers are you competing against?, What is the current market conditions?, how much have closely comparable homes in the area been selling for lately? How motivated are the sellers? And many other factors. You are the only one who can determine how much you should offer a seller.  You can ask for your agent for their advice and thoughts, but ultimately you are the only person who can determine how much you should offer. The answer to this question has a lot to do with the current market conditions and how many offers you may be competing with as well. To get some good insights on the entire process and buyers strategies, read my free booklet: The Utah Home Buyers Guide.



What is an earnest money deposit?

An earnest money deposit is the portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith, and it is sometimes referred to as a “good faith deposit. The primary purpose of this deposit is to show a seller you are serious about purchasing their home. The amount that is deposited is subtracted from the final figure that a buyer pays at the closing table.  In most cases, the larger the deposit, the stronger a purchase offer looks to a seller. The deposit can be any amount, but most commonly, I see earnest money deposits averaging about 1% of the purchase price in our Utah market.



How long does the seller have to respond to my offer?

A real estate purchase contract will have a “life.”  The “life of the offer” can vary from just hours to a week, but most commonly I see the seller’s time to respond as 24 to 48 hours.  There are many circumstances that can affect the length of the “life of the offer.”  A sharp agent should know how long of a “life” to give to your offer.  If you’re looking to purchase a home that is newly listed and the possibility of multiple offers exists, a shorter life is recommended.  If the home you’re looking to purchase has been on the market for 3 months and the seller is located out of town, a 3 to 5 day “life” maybe necessary and/or recommended. Consult your agent for their recommendations.



What if my offer is not accepted?

When an offer is submitted to the seller, there are generally four possible responses.  

1. The offer is accepted

2. The offer is countered 

3. The offer is rejected 

4. The offer is ignored


Note: If your offer is rejected, meaning the seller says no and doesn’t counter, you have the right to place another offer.  It is not very common for an offer to be ignored and not responded to at all, unless a seller is offended by a low-ball offer.



What about inspections…Do you recommend them?

Absolutely. I always recommend that you have any home you are looking to purchase, professionally inspected; even new construction. Your purchase contract should be written in such a way that your offer is contingent upon a satisfactory home inspection, pest inspection, chimney inspection, radon test, and any other inspections of your choice. There is much more details about inspections and inspectors in my Utah Home Buyers Guide, its free and you can download your copy right here.


What are the steps in the home buying process? 

This is an easy one...I have it all written out for you in my booklet: The Utah Home Buyers Guide. It’s a short read and I make it all easy to understand. Download your free copy here. If you have any questions after reading through it, please give me a call or text on my cell phone at 801-455-6222. Or email me at: John@AmericasBestRealEstate.com 

I am always happy to help you.