House Buying Questions & Answers

Common House Buying Questions

What is a Home Warranty & Do I need One?

This is a common question when buying a home. Unless you are buying a brand new home with brand new appliances all under warranty, the answer is always YES! A home warranty covers your appliances in the first year of home ownership and many other items depending on the type of home warranty that you purchase. There are comprehensive home warranties that will cover just about anything. This can save you anywhere from hundreds to thousands of dollars in the long run and is definitely worth it in all of my experiences. Every home has some issues and a home warranty can really help you get the repairs you need with very little out of pocket cost.

What are Closing Costs & How Much are They?

When you purchase a home, there are fees paid to the title company and lender known as closing costs.

The title company ensures that you own the home, and that there is no one else on title but yourself, your company, your trust, or whomever else you choose to hold title to your property. The title company also ensures that there are no hidden liens against the property like a mortgage or taxes.

In Arizona, the title agency also opens escrow and holds funds for distribution. Title and escrow fees are based on the purchase price of the property and can range anywhere from $1,500 – $3,000 on average.

The lender helps you get approved for the loan, and gets paid to do so. Their fees are typically 1.5% of the purchase price. However, this completely depends on the lender, the type of mortgage you receive (FHA, VA, Conventional), and the interest rate. For more accurate costs you will want to reach out to a mortgage loan officer.

What Repairs are Covered?

Repairs that are covered is somewhat in your control. You can request to have anything repaired during your inspection period. The seller decides what they are willing to fix. It makes the most sense to ask for anything major to be repaired and leave out the small stuff. However, you can ask for anything. This is all part of the negotiations. I have many years of experience with negotiating repairs and I’ve seen anything from a new roof to thousands of dollars off the purchase price. It just depends.

What is an Earnest Deposit?

An earnest deposit is a certain amount of money that you are putting into escrow to show how serious you are about buying the property. It is collateral that can be forfeited if you decide to breach the contract by canceling for no good cause. I have NEVER, not even once, lost an earnest deposit for a client. There are safeguards built into our contracts that protect your earnest money deposit to ensure this never happens, unless you intentionally make it happen. i.e. You have cold feet and decide after your cancellation period that you do not want to buy the home.

Do I Need a Home Inspection?

Yes! You absolutely need a home inspection! It’s not necessarily about trying to find out what a seller may not have disclosed. It’s more about finding anything that a seller doesn’t know about.

The biggest reason for a home inspection is to determine if there is anything major that would greatly affect your overall investment, and negotiations.

Home inspections typically range from $300 – $500 depending on the services that you order. There are comprehensive home inspections that look at absolutely everything including scoping the sewer lines to the curb.

How Do I Determine the Purchase Offer Terms?

This is where I come in as well! The amount that we offer is based upon several factors.

I start with performing a comparative market analysis or CMA, to determine the value of the home. We need to ensure that the property will support the purchase price. Once we have a good understanding of the home’s value, then I move on to my probing questions and investigative work.

How popular the home is, whether or not they’ve received any other offers, the way they answer the questions, their tone etc. are all important factors. The conversation that I have with the other agent in the transaction tells me a lot about what we can or need to offer in order to buy the home.