BUYING & SELLING REAL ESTATE
FAQ FOR BUYERS
A- A purchase agreement is a written contract between both the buyer and the seller that lays out the terms and conditions that which the buyer wants to purchase the property from the seller.
Q- Do I pay you for your services as a buyer?
A- Most commonly the answer is no, the commission is paid by the seller out of their proceeds to the listing agent’s and buyer’s agent’s broker. However, there are cases where a buyer may be asked to pay a commission if there is an unrepresented seller.
Q- How long does the process take to purchase a home?
A- The length of time is different for each buyer, however, once you have an accepted offer you could expect a closing time around 40-50 days, sooner if you are paying cash.
Q- What are closing costs?
A- Closing costs are costs associated with you closing the transaction. Some of those costs are: credit report fee, flood certification, lender fees, appraisal, wire fees, settlement fees, recording fees, title examination fee, and Iowa title guarantee fee.
Q- What is PMI? Do I have to pay this?
A- PMI is an acronym for Principal Mortgage Insurance, what this is a protection for the lender in the case that a buyer defaults on their loan, the lender will not have as large of a loss. This is a case when the buyer has not put at least 20% of the purchase price for a down payment.
Q- What are the out of pocket expenses I have to pay for before closing?
A- Some expenses that you could expect to incur are: inspections (general, radon, HVAC, etc), one year’s home insurance binder, appraisal, moving, and possibly some repairs-depending on the type of loan you are getting.
Q- What is an escrow account?
A- Part of the closing costs is to set up your escrow account. This is the account that your taxes and insurance are paid out of by your mortgage servicer on your behalf. You need to set this up so that ways the next time taxes and insurance come due, then you have enough money in your escrow account to pay them. Some people may choose not to set up an escrow account, and pay their taxes and insurance directly.
Q- Can we move in early?
A- Quite possibly, but as REALTORS®, we would not recommend it. Other arrangements should be made with friends or family.
Q- What is earnest money and do I get it back?
A- Earnest money is the investment that a buyer has in the transaction. The larger the earnest money the deposit the more serious it shows the seller you are. It is recommended that a buyer writes a check for at least 1% of the purchase price. The earnest money check is deposited into the listing agent’s broker’s trust account after an offer is accepted and will be returned to the buyer by a credit at the closing.
FAQ FOR SELLERS
A- An abstract is a collection of all of the documents that have been filed at the county courthouse. The abstract contains such things as the original plat map, mortgages, and the release of mortgages. You should have received your abstract after the closing of your home. The abstract company will either store them or have you pick it up or send it to you. You should keep this in a fire proof safe or a safety deposit box, they can be expensive to replace. The abstract needs to be updated prior to the sale of the home.
Q- What is a listing agreement?
A- This is a legal document that spells out the terms and conditions of the contract between the seller and the broker.
Q- What are the fees associated with selling my home?
A- Some of the fees incurred include: commission, taxes, transferring fees, abstract update, and document preparation.
Q- Who pays the commission?
A- The commission is paid out of the seller’s proceeds to the listing agent’s and buyer’s agent’s brokers.
Q- How long will it take to sell my house?
A- There are many factors when listing your house. Taking into account the current market conditions and your competition, you’ll want to prepare your home to look its best and price it to be competitive as well. Once you have an accepted offer, you could expect a closing in 40-50 days, less if you are paying cash.