Common Questions and Answers

Q: What is a buyer’s agent?

A: The concept of a buyer’s agent is recent – the first ones began appearing in the mid-1980s, in response to confusion over which agents work for. Under the traditional system, a single agent could work for a buyer and seller – an obvious conflict of interest. In contrast, a buyer’s agent works exclusively for the home buyer and cannot represent the seller unless specially agreed upon by the buyer.

Q: How long does the home buying process take?

A: Depending on how quickly we find the right home for you, homes can be purchased within a 30 to 40-day time frame, if buyers are pre-approved with a lender.

Q: What is a pre-approval letter, and how does it benefit me?

A: The first step in purchasing a new home is discussing your financing options with a mortgage banker or broker. There is a wide variety of mortgage products available, and mortgage reps can explain all of the options, and find the perfect product for your needs. Once that is established, it speeds up the process, makes your offer stronger knowing that you are pre-approved, and give us an exact idea as to what you can afford to spend on the home. All of this helps greatly in creating a seamless transaction.

Q: What is earnest money, and where does it go?

A: Earnest money is a check that goes onto escrow to show the sellers that you are serious about wanting their home. The more earnest money you give with the offer, the stronger the offer. The money sits in an escrow account limbo until the closing takes place. The clock starts once the offer is signed and accepted by all parties. There are time limits on getting financing approved, inspection is done, etc. If for some reason you cannot, or do not want to go through with the purchase (within the time frame outlined in the contract), the escrow money will be refunded. Once we head to closing, this money comes off the top of the money you would need to bring to close. In essence, the money represents good faith that all parties will perform on the contract.

Q: What is the difference between an offer and a contract?

A: Once we decide which property you want to go with, we make an offer on the property in writing, with an earnest check, and submit s it to the seller, and they either accept, decline, or counter offer. Once the terms and price are agreed upon, all parties have signed, and a copy is delivered to all parties, the offer becomes a contract.

Q: How do we decide what offer on a property?

A: After picking the perfect property for you, the research begins, we look for comparable in the neighborhood of what is currently active, and what has sold. After we arm ourselves with as much knowledge as possible, we present our offer. Historically homes in Indian River Country have gone for about 95% of the listed price. But the market has switched over to a little bit more to the buyer’s advantage, and there is some room for negotiation. It is our job to get you the best home at the most reasonable price!

Q: What is title insurance and who pays for it?

A: Buyer’s fees on a conventional mortgage include

  • A fee to record the deed

  • A fee to record mortgage

  • Docs stamps on the mortgage

  • Courier fees

  • Lender fees

  • 1-year prepaid Homeowners/Flood Insurance

  • Application fee

  • If purchasing a condo, there would be association fees prorated to date of closing and a fee to record condo approval.

  • Q: What are mortgage broker fees?

  • A: Mortgage broker fees would typically include:

  • Loan origination fee

  • Loan discount or points

  • Appraisal fee

  • Credit report

  • Lender’s inspection fee

  • Mortgage insurance application fee

  • Assumption fee

  • Mortgage insurance application fee

  • Assumption fee

  • Mortgage broker fee

Q: What are the typical buyer's fees on a cash closing?

A: Buyer's fee on a cash closing include:

  • A fee to record the deed

  • If purchasing a condo there would also be association fees, prorated to date of closing and a fee to record condo approval.

Q: What charges are required by the lender to be prepaid?

A: You may be required to prepay certain items at the time settlement, such as accrued interest, mortgage insurance premiums and hazard insurance premiums.

Q: Why would there be pre-paid interest charges?

A: Lenders usually require borrowers to pay the interest that accrues from the date of settlement to the first monthly payment.