How much does it cost to buy a home?

Typically, home buyers use 3, 5, 10 or 20% down financing when buying. Closing costs and prepaid items are also necessary and range between 1.5-2% of the loan amount. Appraisals and home inspections are not usually included. A buyer can ask a seller to help pay for some of the closing costs and prepaid items when buying a home.

Down pmt. % + Closing Costs & Prepaids (2%) + Appraisal & Inspection ($300-500) = Total Cost of Buying a Home.

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How long does it take to buy a home?

With the technology available today finding a home that fits your wants and needs can be done in a matter of seconds. The average buyer will look at 5-10 homes before they decide on which to buy. Once you meet with a lender and arrange for financing, it usually takes 30-45 days before closing and moving into your new house.

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What is the best type of financing for me?

Meeting with a loan officer (home financing consultant) is a great place to start when buying a home. Today there are hundreds of home financing options available and a loan officer will provide you with the information and advise to help you make a choice that works best for you. The most important factors to consider when choosing a mortgage are amount of down payment, how long you plan to live in your new home, credit history, and current interest rates.

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Why do I need a Realtor when buying a home?

During your lifetime, you probably won't make a larger, more important decision than buying a home. A Realtor will provide you with the guidance and advise in addition to representing your best interests throughout the entire transaction while handling all of the details up to closing. A professional Realtor will locate and coordinate homes for you to view and explain the purchase agreement and contracts you'll be signing when you do find a home. It's not necessary to use a Realtor when buying a home, but it's hard to imagine going through the home buying process alone.

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Can I buy a home before I sell my current home?

Maybe. Many homeowners are worried that they won't be able to find a new home after they sell theirs. They worry about having to make a quick decision on a new home that they are not truly excited about. As a home buyer, they can purchase a new home contingent on them selling their current home or purchase non-contingent on the sale of their current home. Unfortunately, some people are not in the financial position where they can qualify for two mortgage payments at the same time or are not willing to take on the financial burden of owning two homes at the same time.

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How much do I offer when I find a house?

What ever you feel the home is worth. The increase in the real estate technology has given Realtors the tools to provide sellers with an accurate market evaluation. This has resulted in an average sale price in the Chippewa Valley area of 97% of asking price. Most homes sell at or around this figure. However, in multiple offer situations, buyers will pay over the asking price in order to take advantage of a great deal. It is very important that you understand the existing market conditions and know that you are not overpaying for your new home. Put together a purchase agreement that you feel comfortable with including the sale price, financing terms and a closing date that works into your time frame.

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Do I need a home inspection?

A home inspection is not required when buying a home. However, it is strongly encouraged. During a home inspection, you'll learn the ins and outs of the home and any potential safety and health issues before you are locked into a purchase agreement. The average inspection takes 2-3 hours and will cost between $200-300.

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What is a closing, and what happens at the closing?

The "Closing" is an industry term for the close of a real estate transaction. A seller will receive their proceeds and sign over the title to the buyer. The buyer will finalize their mortgage and receive title from the seller. A closing typically will take about an hour and, after everything is complete, the keys are handed over to the buyer and the house is theirs!

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What about homes that are offered for sale by owner?

Many buyers think they'll miss out on homes offered for sale by owner (FSBO) if they are working with a Realtor. This is hardly the case. The majority of FSBOs are expecting to work with a Realtor and pay a commission. If you find a FSBO home you'd like to purchase, it is very important to have someone look out for your best interests and make sure the entire transaction is handled properly. A licensed Realtor can do this for you or you can also consult with an attorney.

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If I'm working with a Prudential Benrud Realty agent, can I look at homes offered through other real estate companies?

YES! A professional Realtor will provide you access to the homes offered through Realtors Association of the Chippewa Valley (RMLS). The RACV is an online service that Realtors use to search through active homes for sale and homes that are no longer for sale. Your Realtor will locate properties that fit your search criteria and arrange for showings through the listing company.

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Paying off the existing first mortgage

The interest costs on your mortgage are adjusted from the date of your last payment to the date of closing. Also, check with your mortgage holder to determine if there is a prepayment penalty for prepaying your mortgage (there are no prepayment penalties on either VA or FHA mortgages.)

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Other financing outstanding on you property

Home improvement loans, second mortgages, contracts for deed, mechanic's liens, tax liens or judgments.. all of these may need to be paid at the time of closing.

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Contract for deed discounts

If you sell your home and part of the buyer's payment to you is in the form of a contract for deed, the contract can be sold by you to third parties, but only at a discount (less than the face value). This rate fluctuates with the money market.

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Special assessments of record

These are usually paid by the seller, but the buyer may be asked to pay this cost or agree to assume it. If your home is sold with new financing, you may be asked to pay the special assessments of record since most lenders will not mortgage a home that has an assessment against it. (This does not include annual special assessments for such things as lighting, park board, garbage pickup, etc.)

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Pending special assessment

Provisions usually must be made for the payment of pending's special assessments at the time a new mortgage is written. Since the exact cost of a pending special has not yet been established, lenders require that either the buyer or seller deposit two times the estimated amount into an escrow account until the exact cost has been established. At that time, the specials will be paid and the extra funds in the escrow account returned to whoever paid them. Closing such an escrow account sometimes takes as long as one year.

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State deed tax

This is established by the selling price of the home, and the rate is $3.00 for each $1,000 of purchase price.

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Balance of real estate taxes due at closing

Any postponed real estate taxes are due at closing. Check with your lender to determine this figure if your real estate taxes are escrowed.

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Placement fee

This is the points which need to be paid to a lender to get new financing for your home.

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Buyer's closing cost

In some instances, buyers ask sellers to pay their closing costs for new financing. This fee is in addition to the mortgage placement fee.

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Other costs

These are sometimes incurred as a condition of your property when qualifying for new government financing: survey, water test, bringing your electrical service up-to-date, making necessary plumbing repairs or repainting the exterior and/or interior of your home.

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