Nick Vandekar, Tredyffrin Easttown Realtor with Long & Foster Real Estate, Inc. answers some of the most frequently asked real estate questions. Those titles in blue have blog posts linked to them which may give a fuller answer and also videos. Click the title to watch a video on this.
What is the Consumer Notice?
Before any Pennsylvania Realtor or Real Estate Agent discusses real estate with you they need to by State Law explain the Consumer Notice to you so you know who is representing whom in a real estate transaction. The purpose is so you are not misled into thinking you are being represented when you are not.
What houses can you show me?
We can show you any house that is for sale by any broker, either in the MLS, For Sale by Owner or New Construction. If no commission is offered we can incorporate our commission into the offer as part of a sellers assist.
What is a Sellers Assist?
This is where the buyer asks the seller to contribute a percentage of the sales amount or a specific sum of money, as allowed by your mortgage company towards your closing costs.
How long is the buying process?
This depends on how much research and knowledge you have of the area and your own tastes and needs. Generally from making an offer to settlement the normal timeline is about 30-60 days, but it can be shorter or longer depending on circumstances.
How much do you charge?
Sorry, we are starting to sound like an attorney, it depends...call us to discuss your needs.
Will you reduce your commission?
No. Whilst our commission is negotiable, what services would you like us to drop out of the transaction? We want to represent you in the best way possible and don’t believe we can do that by cutting different things from what we normally do.
Who pays you?
Usually in our area a home that is listed in the Multiple Listing Service (MLS) offers a level of compensation. On the settlement sheet the commission shows as being paid by the seller, however, the seller pays it with the buyers funds that are brought to settlement. That commission is split between the listing broker and the broker for the buyer.
How much money do we need?
The more the better, whilst there are mortgages available with 3.5% down, they are more expensive than if you put more money down. You will also need about 5-8% of the sales price in closing costs. These include: your down payment, home inspections, title insurance, home insurance, escrow account for future taxes set up, current taxes and moving costs.
Why do I need a pre-approval before you will show me houses?
We have had a client lose a home whilst they have tried to get their mortgage pre-approval, so just in case, we find the perfect home on our first search, we ask that you get pre-approved.
How much notice do you need to set up an appointment?
This depends on our schedule and that of the seller/tenant. Some homes require 24 hours notice when occupied by a tenant. As a side note, tenant occupied homes also may not always be show ready. The more notice you can give the better.
Why am I seeing a property for sale on the internet that you have not sent me?
Some websites are not current with the market and are updated less often than our MLS. They will also show a home as active even when it is under contract, so these homes may appear to be available when they are not. The home may be priced higher or lower than we have discussed, or be outside the search parameters we have entered.
What happens to my deposit?
Your deposit is held in escrow. In our area, this is usually with the listing broker, either until settlement, when it makes up part of your down payment or closing costs or until the transaction is terminated and a release is signed by BOTH parties, buyers and sellers. This can take some time and the broker, cannot by law, return your deposit until everybody has signed.
What is Escrow?
Escrow is where a thrid party who is neutral holds the deposit involved in the transaction. There are rules and regualations about these accounts and how the money deposited in them is handled and released. An obvious example is that they cannot be comingled with business funds for the holding party. Another is to have your deposit released from escrow, you will need a Release from the Agreement of Sale signed by both parties before the finds can be returned to the buyer.
If we don’t get our mortgage, do we get our money back?
Depends on how the agreement of sale is written. Usually we include a mortgage contingency; this allows you to get your deposit back. However, many builders of new construction want the mortgage contingency removed as early as possible putting your deposit at risk if you don’t go to settlement.
What are basis points?
Mortgage providers often use different terms when talking about rates and costs. This term basis points is often used to tell you how much a loan lock might be, for example 12.5 basis points to lock for 7 days. 100 basis points equals 1% of the loan value. 12.5 basis points would be 0.125%.
What are points?
Another term mortgage people use is points. Points is similar to percent, and 1 point equals 1 point, or half a percent equals half a point.
How many deposits are there?
On the Main Line, usually two, one is called an earnest money deposit that accompanies the agreement of sale and is not cashed till agreement is reached and signed by all parties, then there is a second usually made after all inspections are completed. The total deposit usually is for about 5-10% of the total sales price.
Can we visit open houses or new construction on our own?
Generally, if you visit any home for sale, let me know beforehand, so I can register you and protect your interests throughout the transaction if you decide this is the home for you. All it takes is a little planning ahead of time.
What happens if the property does not appraise for the full amount?
We can either ask the seller to adjust the price to the appraisal amount, negotiate an agreed price between the sales price and the appraisal or terminate the agreement if an appraisal contingency was used.
Will I need a home inspection?
Yes, unless you or relatives are licensed contractors who are willing to waive the inspection contingencies, our advice is to get an inspection. Sometimes we will advise you to do an inspection ahead of making an offer.
Do I need a survey?
In Pennsylvania it is not common to do a survey, however, if the size of the property is important to you, or if you intend to erect fences, it may be worthwhile to pay for a survey to know exactly where the property lines and corners are.
What is Title Insurance and what is the difference between a standard policy and an enhanced policy?
In Pennsylvania the mortgage company will require Title Insurance to cover their interests in the property, you can also order an owners policy to cover your own interests inthe property. The Standard policy basically covers you backwards from the settlement date for any problems with title, the enhanced policy which costs 10% more covers you backwards and forwards from settlement and also increases to 150% of the purchase price of the property. There are some deductibles and caps for different issues.
What happens if there are multiple offers?
At the moment, due to the lack of inventory, in the market at different price points there may be a multiple offer situation. In this case, you can do two things: make your best offer going in, or use an escalation clause if acceptable to the seller. In today’s market, there may be as many as five or six offers on any one property.
Will we know what the other offers are in a multiple offer situation?
This depends on the seller. Usually not, our advice is to make your best offer to begin with and know your limit.
Will I have to pay over asking?
As there is a shortage of inventory right now, some homes in some areas are selling for over the asking price, we will endeavor to help you craft an agreement of sale that covers all important issues for you and the seller to reach an agreement.
How will the house be at closing?
Do I need to attend a walk through? In the PA agreement of sale it specifies the house will be broom clean, however, it is always good to do a walk through to make sure the house is in the condition you expect, that nothing has been stolen from the house, there is no trash left behind and no damage has been done to the house since you last saw it.
When do I get the keys and am able to move in?
At settlement, if all the finds arrive on time, the seller signs the deed and hands over the keys to the property. Following closing you can move into the house.