Answering Your Home Buying Questions

Buying a home is both thrilling and a bit unnerving, especially if you're a first-time home buyer. Both experienced and first-buyers alike will benefit from the frequently asked questions below. Before you begin your Twin Cities and Northwest Suburbs home search, it is recommended that you prepare yourself for the journey by educating yourself. This will ensure you are a knowledgeable home buyer prepared to make a confident home buying decision.

Q: I've never purchased a home before. Where should I begin?

A: Actually, you’ve already started the process. Fact-finding and reading articles is a great way to become a smart consumer. The highest priorities to focus on before you begin searching for specific areas, neighborhoods, or homes would be to:

  • Familiarize yourself with your personal finances.
  • Contact Smart Move Home Team and learn about the Twin Cities and Northwest Suburbs real estate market.
  • Carefully review your budget and begin to eliminate as much debt as possible.
  • Have a down payment and earnest money ready when the time comes to act and make your offer.

Q: The home buying process seems overwhelming. What are the steps involved?

A: Our goal is to help identify the steps in the buying process. We want to make the home buying process pleasant and memorable for you by providing the information you need to make an informed decision. Below are the twelve steps that summarize the process:

  • Buyer consultation
  • Pre-approval for loan
  • Properties selected to view
  • Prioritize the homes previewed
  • Purchasing Decision made
  • Agreement prepared
  • Negotiate contract signed and accepted
  • Inspections and conditions are satisfied and removed
  • Place your loan
  • Loan is processed / Escrow ordered
  • Loan Approval
  • Closing on property

Q: What costs will I be paying for out of my pocket?

A: Here is a breakdown of typical costs paid during the home buying process:

  • Earnest Money – Earnest money is basically a down payment on your down payment. It is submitted in the form of a check with your offer, and if your offer is accepted by the seller, it is placed in the listing broker’s trust account until closing. Typical earnest money expectation by the seller is 1% of the sales price. The more earnest money submitted, the more seriously the seller may interpret your offer to be.
  • Down Payment – The minimum down payment will vary depending on the type of loan you choose. Most first time home buyers like the FHA mortgage program, as it requires as little as 3.5% as a down payment.
  • Closing Costs – These costs include the cost of obtaining and processing your loan, the compensation due to the loan officer, the title costs (and title insurance). You will receive a Good Faith Estimate from your loan officer. In today’s environment, many times sellers are willing to contribute toward your closing costs, lowering the out-of-pocket dollars required of you as the buyer. Seller paid closing costs are part of the negotiations done at time of offer.
  • Inspection – Inspection costs vary from inspector to inspector, and are often based on the size of the property. These fees are typically paid upon inspection. Fees start around $350 and go up.
  • Appraisal – Appraisals are typically paid out of pocket prior to closing and are normally out of pocket. Fees start around $400 and go up from there.
  • Homeowner’s Insurance – Normally your lender will require one year of homeowners insurance to be paid prior to closing. Fees vary based on a number of different criteria, including location, buyer credit, home amenities, and claims history.

Q: With all the different types of mortgage products, how do I avoid making a big mistake when deciding which type of loan to select?

A: Once we meet and review your finances along with your home buying needs, you should select a lending consultant. We can recommend several trusted lending professionals or you can choose your own. Having utmost confidence in your lender is important. Be sure you feel completely at ease with them. They should speak to you in easy to understand terms. Ask lots of questions and never sign any document until you know what you are signing and feel completely at ease signing it. More and more lending professionals are recommending fixed interest rate loans and interest rates are still very attractive. Of course, the type of loan best for you depends on several factors. Here are just a few:

  • How much money do you have for a down payment?
  • How long do you plan to live in the home?
  • Do you qualify for a FHA or VA loan?

Q: What are the next steps?

Your next step is to contact us. As your home buying specialists, we’ll protect your interest and manage the details of the real estate transaction on your behalf to your complete satisfaction. For more experienced buyers, a little brush up on the real estate process wouldn’t be a bad idea. Our real estate team is here to protect your interests too!

Let's Get Started!

Are you ready to schedule your home buying consultation?  If so, contact us today and together we will review your needs and your budget to help you find the right home for you!