10 Most Common Real Estate Questions
Whether you’re buying your first home or selling your fifth, real estate can feel like uncharted territory full of questions. From pricing strategies to navigating the mortgage process, there’s no shortage of things to consider. And let’s face it, understanding all the ins and outs of the market and the process of buying a house can be overwhelming. The tough real estate questions pile up.
With years of experience in property management in Boston MA, we have gotten just about every question under the sun. It would be helpful to many to compile many of the most common real estate questions we get in one place. Whether you’re a buyer or a seller, these FAQs will help you make smarter decisions and feel more confident throughout your real estate journey.
Table of Contents
- Should I rent or buy a home?
- How much house can I afford?
- What is a mortgage, and how does it work?
- How do I get pre-approved for a mortgage?
- What are the closing costs when buying a house?
- What is a home inspection, and do I need one?
- How long does it take to buy a house?
- What is the difference between a buyer’s and a seller’s market?
- Can I buy a house with bad credit?
Should I rent or buy a home?
This is one of the most common real estate questions: is it better to buy or rent? It is a very personal question since there are pros and cons to both options. Buying a house is considered more of an “investment” in the long term, which many appreciate. On the other hand, purchasing a house involves some risk and a lot of upfront costs that some people are not able to afford. Thus, a lot of people prefer to rent. Starting with your own list of benefits and drawbacks to each option would be a useful start to help you decide.
How much house can I afford?
There is, of course, no specific answer to this question. There are many tools to help you start to hone in on an answer to this question. Many are online. You can go to Realtor.com, Zillow.com, and other websites that have mortgage calculators. While these don’t give you an in-depth picture of how much you can afford on your house, they are a good place to start.
What is a mortgage, and how does it work?
Of all the real estate questions people may have, this is one of the most fundamental. A mortgage is a type of loan. Pretty simple, right? Specifically, it is the type of loan used to purchase real estate. When you take out a mortgage, you borrow money from a lender to buy the property. In return, you agree to repay the loan over a set period. There are pretty set standards for what people can expect for these terms – usually 15 to 30 years. That’s a long time, sure, but it makes sense with such a large purchase.
This loan amount includes interest on the loan. The property itself serves as collateral, meaning if you fail to make the required payments, the lender has the right to take possession of the property. What is this called? Foreclosure.
The process of acquiring a mortgage involves a few steps. First, you apply for a mortgage and go through a qualification process where the lender assesses your financial situation, including your credit score, income, and debt levels. If you are approved, you receive the loan and use it to purchase the property. You then make monthly payments that cover both the amount borrowed and the interest. If you sell the property before the mortgage is fully paid off, the proceeds from the sale are used to pay off the remaining loan balance.
How do I get pre-approved for a mortgage?
If you’re planning on purchasing a home, getting pre-approved is an important early step in that process. It can be quite quick and painless, but it is important to ask yourself these real estate questions before it is too late. You will need to put together a number of documents, such as pay stubs, tax forms, and bank statements. The lender will inform you of what specific documents you will need.
You will submit those to the lender and fill out some forms. The lender will pull your credit and review your financial situation. Once that is done and you qualify, they will provide you with a pre-approval letter that includes an estimate of the amount you can borrow.
What are the closing costs when buying a house?
This is an important real estate question that many approaching a purchase should consider. When purchasing a house, closing costs include various fees that are included in the final amount owed. They include fees such as loan origination fees, appraisal fees, title insurance, and attorney fees. They generally range from 2% to 5% of the home’s purchase price.
What is a home inspection, and do I need one?
A home inspection when purchasing a home is an opportunity to have a professional scrutinize the house and its features. It is recommended, but not required. While anyone can see superficial needs or issues that a house may have, a professional will be able to observe problems that others will not have the knowledge or experience to discover. An inspection will be conducted, which examines and finds potential issues with the below.
- Structural elements and the foundation
- Safety features
- Roof
- Exterior surfaces
- Ventilation
- Attic and basement
- Interior plumbing
- Electrical systems
- Appliances
- Garage
How long does it take to buy a house?
According to ICE Mortgage Technology, the average time to close a purchase is about 51 days. This is adjusted regularly though, so you can generally expect the average to hover around 50 days. This includes the time in which the house is under contract to the closing date.
What is the difference between a buyer’s and a seller’s market?
The most significant difference between a buyer’s and seller’s market is who has the upper hand — the buyer or the seller. The power dynamic leans toward the buyer in a buyer’s market and a seller in a seller’s market. It is certainly something that you would want to know, and one of many crucial real estate questions that will determine how your investment will do in the long-term.
In a buyer’s market, there is more housing inventory, which generally goes hand-in-hand with lower prices. So the buyer has the upper hand. Conversely, a seller’s market means that sellers are more likely to ask for more money and encourage bidding wars since there is low housing inventory and the price for housing is more likely to be higher.
Can I buy a house with bad credit?
Yes, it is possible to buy a house with bad credit. There isn’t one set credit score that is needed to purchase a house. How bad your credit is can determine just how difficult it will be. There are a lot of tips for buying a house with bad credit that can help determine what is possible with your current credit score, as well as what you can do to improve it.
Get More Answers with Bay Property Management Group
Whether you’re looking to invest or want to buy your first home, you are likely going to have a lot of real estate questions like these. It’s important to research, know your options, and prepare accordingly. It certainly would help to have experts to back you up.
If you’re looking to manage multiple homes through renting, consider hiring professional management to keep things in order and walk you through the process. Bay Property Management Group can help with every step of the process, from marketing to tenant screening, maintenance, rent collection, and more. Contact BMG today to learn more about our services throughout Boston, Baltimore, Philadelphia, and beyond.
