Hi, I’m Joann Harbour, Realtor® with Jean Scott Homes at Keller Williams Advantage Realty. Today I’m answering questions submitted from first-time home buyers about what goes into the home buying process.
Question #1: “I’m currently trying to buy a house and the biggest question I keep asking is about price breakdowns and whether I’m truly getting the most for my money. Also, negotiation points of what to ask for in closing and what’s off the table…”
The fees involved in purchasing a home will be money for your inspection, your closing costs, and your down-payment. The average inspections costs $450, but of course that varies by lender and by the size of the home. Your closing costs encompass lender fees, your appraisal and survey, taxes and insurance. As far as getting the most for your money, when you’re interested in a home, a Realtor® will provide you with the area statistics for what other homes have sold for, that will help you determine what you’d like to offer and whether the home is priced appropriately. With negotiations and what’s off the table, currently we’re still leaning towards a seller’s market and we have a lack of inventory. Asking for closing costs to be covered is something that is less common in that market. You can still ask, but it can make it seem like you don’t have enough funds to close and may make your offer weaker. If other people have offers in on the same home, I would advise against asking for closing costs to be covered. Usually people only ask about closing costs and personal property.
Question #2: “Am I paying too much rent for my apartment or house rental? Is it better to buy?”
Right now, rent prices are the highest they’ve been. In a lot of cases, it will cost you the same to rent as it would for your monthly mortgage. Owning real estate is one of the ways to build wealth and puts you in a more secure position financially, typically.
Question #3: “What are the pros of buying as opposed to renting? After my parents divorced and sold their house, my mom swears to always rent. She likes having a landlord and being able to call when things go wrong, instead of having to figuring it out herself.”
When you own the home, you have more security in where you live, the price is always going to stay, typically, the same for the mortgage you’re paying, not including tax increases or decreases. You can personalize your living space to your liking and you wouldn’t have to worry about where you’ll be in the next year. If you own your own single-family home, you have more privacy then when you’re in an apartment. Home-ownership is one of the paths to wealth, you’re investing in what you own. I had one client that rented for almost 20 years; she could have paid off the house in that amount of time. Some people like the flexibility of moving and some people hate moving every year. It could also depend on your job; if you move frequently for your job, renting might be a better option for you. At the end of the day it depends on your lifestyle.
Thank you to everyone who submitted a question to us! Submit your questions to [email protected].