Mike and Jackie Shulsky

Lansing - East Lansing Area Real Estate

 

Frequently asked buyer questions

 

Is now a good time to buy a home?

Should I talk with a bank before looking at homes?

YES! There are many reasons why you should talk with a bank and get pre-approved before 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 $250,000 if you can only afford up to $200,000.

 

How does the lender determine how much I can afford?

The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

 

What are Mortgage Disclosure Forms?

 

What is Private Mortgage Insurance?

 

What is PITI?

 

How do I determine how much to offer on for a home?

Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price. Calculating your offer should involve what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation. By the time you're ready to make an offer you will have likely visited enough homes to have a good idea of what the home is worth. Then be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

 

What is Earnest Money?

Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price. If your offer is accepted, the earnest money becomes part of your down payment or closing costs. Should you reject the property due to inspections, your money is returned to you. You may forfeith the security deposit should you back out of a deal after removing contingencies and agreeing to proceed to closing.

 

Why are homes listed as "active" sometimes unavailable for showings and offers.

A home with an accepted offer will continue to be listed as active until the inspection or other specific contingencies have been removed by mutual agreement of all parties. The property will then be marked as Pending. The process can take as much as 10 to 15 days.

 

How does the home inspection work?

Home buyers almost alway make their offer subject to a home inspection. There are many different types of inspections and tests that a buyer has the right to perform. In most cases, inspections are at the expense of the buyer. They have a specified number of days to complete the inspections and either remove the inspection contingencies or request the seller address issues discovered through the inspections.

 

Where do I find the inspectors?

Searching the internet for Lansing area home inspectors will provide a list of names. Most agents have developed a "short list" of reliable inspectors who you should be comfortable working with.

 

What are Seller Concessions?

Depending on what type of financing the potential purchaser is obtaining, the option to receive seller concessions may exist. There are many home buyer’s with impeccable credit scores and solid jobs but are short on the money required to purchase a home. Seller concessions allow a home owner to contribute a percentage or dollar amount towards a buyer’s closing costs. For example, a buyer who qualifies for an FHA mortgage can receive up to 6% of the purchase price towards their closing costs. This can be a significant amount of money and can be the difference of a buyer being able to afford a home or not or the seller being able to sell their home!

 

What is a contingency?

A Contingency is condition put in a contract that must be met for the contract to be binding. Common contingencies include financing, inspection, and others which protect buyers of real estate and their earnest money.

 

What is a Home Warranty?