We’re here to guide 10 Answers to Your Most Common Home Buying Questions you through the often-complex world of home buying and selling. If this is your first timing buying a home around New Hampshire seacoast and Southern Maine area, you probably have quite a few questions and that’s to be expected. Purchasing a home is one of the largest purchases of your lifetime. We don’t want you to make a mistake. It’s our job to guide you and provide the answers you need for your decision-making.

How Home Buying Really Works

Q1. What’s the first step I should take? 

Begin with getting a mortgage pre-approval. Unless you will be making the purchase with cash it will be necessary to secure a mortgage from a lender. Getting approved for financing first helps   you know how much home you can afford. Once you know how much financing you are able to secure your REALTOR® will show your homes in this range. Pre-approval also let’s sellers know you’re a serious buyer who is ready to make a deal and find a home.

Q2. How much will I pay the REALTOR®?

As the home buyer, generally, zero. In most situations, the seller pays the commission to the seller’s agent and the seller’s agent pays the fee to the buyer’s agent for bringing the buyer to the transaction.

Q3. How long does home buying usually take?

While it can vary from buyer to buyer, the average often falls between 30-45 days. Once the seller accepts the offer a general timeline to close is around 30 days.

Q4. What does a seller’s market mean?

The seller’s market is described as when the increase in home inventory drives up the prices of homes. In general, there are four factors that may drive demand: 1) economic factors which brings new residents to an area in need of housing—pushing prices up before inventory can be built, 2) downward trending interest rates which improves affordability—especially among first-time buyers, 3) a short-term spike in interest rates can be the nudge for buyers on the fence about whether to buy now or wait, and 4) fewer homes on the market—the lower inventory because of lack of new construction means prices on existing homes may go up.

Q5. What does a buyer’s market mean?

The buyer’s market is described as reduced demand and declining home prices. In general, there are five factors impacting this type of demand: 1) an economic disruption such as a large employer shut-down or layoff causing people to leave the area following new job opportunities, 2) higher trending interest rates—this reduces the amount of money people hope to borrow to be lower and home prices typically drop to match the level of demand, allowing buyers to find better deals, 3) short-term decrease in interest rates can give borrowers a slight edge in their purchasing power until the interest rates change, 4) increased home inventory such as a new subdivision will put downward pressure on the rates of nearby older homes, and 5) natural disasters can negatively influence property values in the neighborhoods where the disruptions occurred.

Q6. How many homes should I view before deciding on “the” home to buy?

There’s no magic number. During the home visits take photos and make notes about what you like and dislike about each house. Observe which amenities are nearby. Consider if the home is close to schools, parks, shopping, and restaurants that are important to you. If the home checks off the majority of what you’re searching for, you may be ready to say yes to this house.

Q7. How much is enough for a down payment?

First-time home buyers typically put down 3-5% of the house price as required by several first-time home buyer programs such as the FHA loan program. VA loans and USDA loans can be made with zero down payment. If you’re able to increase the down payment to 10-11% you will be able to avoid private mortgage insurance (PMI) as required by your lender and save money, long-term.

Q8. When will a seller respond to my offer?

When presenting the offer, the buyer’s agent will stipulate a timeframe in which the seller should respond. Often this happens in 24-48 hours.

Q9. What’s next if my offer is rejected?

When an offer is rejected don’t get discouraged because all is not lost. Sellers may initiate a counter-offer and if this happens the deal is not dead. For a counter-offer you and your agent will review the offer to determine if it is acceptable to you. If you approve it, the deal closes immediately. If you don’t, the next step is to make a counter-offer in reply. These can go back-and-forth several times—each revision bringing the buyer and seller closer together on the terms of the deal.

Q10. Is a home inspection necessary?

Yes, we encourage you not to skip scheduling a home inspection. Home inspections are typically required if you plan on financing with a VA loan or FHA loan. Inspections will reveal any defects not easily seen plus provide you a sense of peace for one of largest investments you will be making in your lifetime. Once the report comes, read it. Ask the seller to act on fixing any repairs or renegotiate the selling price to accommodate these flaws.

Hillary Gaynor has real estate listings spanning the New Hampshire seacoast and Southern Maine area. The Bean Group has listings in Maine, New Hampshire, Vermont, and Massachusetts. Hillary is happy to refer anyone outside her area to a trusted agent in her extensive network. Helping you find a good neighborhood is what we do. We pride ourselves in knowing the communities and guiding buyers towards their future homes. Schedule an appointment to get started.