Questions and Answers
There are about ten key questions, objections, or concerns that always come up when we interview a new home buyer, and we would like to take this opportunity to discuss them. There is no particular importance to the order.
1. Question We are serious about investing in a home here in the Anchorage / Wasilla area. What steps should we consider taking in order to accomplish this goal?
Your first step is to get pre-qualified with a lender and have that lender
ready to supply you with a Pre-Qualification or 90% Letter.
- There is no cost to you nor are you making any commitments.
You are simply exploring your qualifications and available loan programs.
- Basic knowledge to be gained would include but not limited to;
down payment, monthly payments and basic buyer strategies.
Next, outline your needs and wants in your new home. This should include things like number of bedrooms and bathrooms, special rooms like study and hobby room, yard, garage/workshop and area of town.
Then, prioritize your needs and wants. Understand that you will seldom find the perfect house that has your every need and want. Start the looking process by first of all establishing what you absolutely need and what can you live without. It would be nice if my new home had (blank) but if push comes to pull I could live without.
Seek out the services of an experienced Realtor that has the CRS (Certified Residential Specialist) certification behind his or her name. This will assure you that your real estate needs are being serviced by a true real estate professional!
2. Question What benefits would I (we) receive if you were allowed to represent our buying needs?
- We have more than 25 years in assisting buyers in our local Anchorage real estate market.
- Rod has earned the designations of (CRS, e-PRO and GRI).
- We have prepared for your viewing an on-line “ Buyer's Seminar ” that will prove to be invaluable to your buying efforts.
- We have put together a team of professionals to assist and address your every buying need.
- We have established an automated system by which you will be notified of any and all new listings just coming on the market that meet your needs. This is done instantly by email.
3. Question Who determines value?
Let's start by mentioning who does NOT determine value.
- The Buyer
- The Seller
- The Lender
- The Appraiser
- The Realtor
- Note : A couple of additional thoughts need to be mentioned. Value is not based on how much the seller paid for the property. It is not based on how much the seller put into the property by way of remodeling. Plus, there is no such thing as sentimental value when determing the worth of the home.
A Home's value is determined by the Market Place!
When showing a buying client prospective homes, we go to great lengths to assist our clients to gain an understanding of market values. We will allow you to see the availability of homes our market offers and how many of these homes meet the buyer's qualifications. We will also allow you to see what has recently been sold/closed and what price and terms were involved.
In the flow of a transaction, the lender will call upon a fee appraiser to conduct an appraisal on the property you are seeking to purchase. That appraiser will seek out information on all sold/closed properties from that area, in the last few months, that are similar to your property. In essence, the value is determined by the “Market Place”, the sale price of other "like homes" recently sold.
4. Question How am I protected from paying too much for my new home?
You are protected by the process itself. You may be buying the home but most likely you are using the bank's money. The bank does not trust you and me solely for the repayment on the loan. They, in fact, plan for the worst case picture, a picture in which the buyer defaults on the loan and they have to foreclose. If the lender originally allowed an inflated or unrealistic value to have been used at the start, the bank would have no equity basis to work with and stand to lose big time. The bank has to be satisfied that value is correct and realistic before they will put their money into the deal on your behalf. With a correct, realistic value in hand, the bank negotiates with you, the buyer your interest rate, down payment and any other related terms. In essence, you can't pay too much. The lender won't allow that!
5. Question If we were to use your services to help locate and purchase a home, how are you paid?
This is a great question. Most folks do not understand how as a Realtor we get paid. We get paid only when you find and close the purchase of your dream home. On the average we will invest many hours helping your line up financing, locating and viewing prospective homes, drawing up your earnest money contract, helping you negotiate your best deal and guiding you through the home inspection process to closing. We have no guarantees of a pay check until closing has been achieved.
In most cases, the seller pays the real estate commission. When a person lists their home with a real estate professional and that listing is placed in the Alaska Multiple Listing Service, generally speaking the selling Realtor receives a 2.5% to 3% commission. There are cases where both the seller and the buyer pay a commission. It is also true there are times when the buyer pays for the realtor commission. All of these arrangements are agreed to ahead of time in writing. But again, the real estate commission in general that we will receive when assisting you in your acquiring your dream home will be paid by the seller, at closing.
6. Question How can I as a Buyer gain an understanding of market values and market conditions?
- Follow newspaper ads
- Drive through neighborhoods and locate “For Sale” signs
- Check out the bulletin boards in the local grocery store
- Ask friends
- Or, seek out the assistance of a real estate professional who will take the time to not only show you homes but also acquaint you with market conditions and recent sold information in order to help you establish market trends
- Note: An experienced real estate professional will take the time to fill you in as to some market history, help you understand current market conditions and try to make sense as to where market trends are going. Keep in mind at all times this is only one person's view and opinion, but nevertheless, an important point of view for you to explore. It is also important to note that market conditions and trends change without notice or warning. Our market is constantly changing. We have seen our market place change literally over night. Understanding market values and trends is extremely important when you are purchasing a new home. Only a real estate professional has the ability to keep up with this fast paced, ever changing industry.
7. Question We understand that the current Anchorage real estate market is a seller's market. Further, we are painfully aware that homes just do not stay on the market very long and are sold in a matter of days or even hours. Is there a means or way by which we can be alerted as to new listings when they become available?
Again, this is where working with a real estate professional comes in handy. He or she is constantly seeking out these new listings and is constantly noting and tracking new homes as they become available. Our team offers several additional helpful approaches. We will help you identify the areas of town you prefer to locate. If no properties are available our team will get into that area by mail, calling or personally talking with owners and try to seek out anyone who might be thinking of selling. We also have gone to some expense and effort to offer our buying clients an instant form of communication that will alert you as to any and all new listings that meet your search criteria. We do this by email and it is immediate. From the start, our team is committed to being available to show you this new listing whenever you are available. In Alaska and with our long summer days, that can be late into the evening, so be it – let's go!
8. Question We're from Kansas. Uncle Harry told us to never offer the listing price. Our offer should always start $5,000 to $10,000 less than listing price and we could negotiate from there. What do you think?
One thing for sure, you're no longer in Kansas! Hold on to your hat. Uncle Harry was half right and half wrong. He was right when he suggested you not offer the listing price, but wrong when he suggested a lower figure. Right now in our market, 8 out of 10 sales are at or above the asking price. It takes some people missing out on two homes to understand the reality of what is taking place in our market place. Determine ahead of time what it is you're looking for and when you find it, jump on it immediately . Hesitating or sleeping on it a day or two is a good way to miss getting your choice. Again, it will take missing out on one or two homes to see the reality of what is going on in our local real estate market. A foot note to this from our experience, when this type of buyer comes to accept the reality of our market place, they jump on the next available product that becomes available and settles for a whole lot less home than they would have if they had gotten serious in persuing the first home. Now they are desperate and unhappy.
Again, understanding local market values and market conditions will greatly assist your buying efforts. As real estate professionals, we are involved in this arena daily. We are the best persons in the world to talk to as to how you can achieve and realize real estate needs. Uncle Harry's comments might be of some value in Kansas, but you're not in Kansas any more!
9. Question Why should I invest in my own home?
- You are in control of your own environment. As owner you can paint, carpet, redecorate as you desire and not have to ask for permission. You don't have to worry about uncontrolled rent increases you may or may not be able to afford. You don't even have to put up with the noisy neighbor upstairs!
- Property values in the last four years have gone up over 50% in value. As you sit on the sideline, your buying ability shrinks. No one can predict what our market will do in the future. Yes, we will see values go up and down. But, in the long run owning real estate has proven to be the best investment a family can make.
- In making your payments on a home, you will pay on your principle, interest, taxes and insurance. The interest and property taxes you pay are in truth tax write offs when it comes April 15. This can mean that buying a home can possibly mean a big tax savings.
- Owning your own home allows you to have a sense of pride , this is yours!
10. Question How can I be assured that the property I am buying is free of any major problems? (Problems relating to title and structural integrity.)
When it comes to the structural integrity of the property you're purchasing, I will beg you to perform a home inspection of the property by a legitimate home inspection company. A legitimate home inspection service will professionally conduct an extensive inspection the property that will look into every major component of the property. The buyer is generally responsible for hiring and paying for the inspection service. This generally costs around $350.00 and is paid at the time the inspection is completed. This is an area of major importance. Uncle Harry is not the right person, nor will he be allowed to do the inspection unless he is a legitimate home inspector. Legitimate home inspection services bring to the table experience and a track record; they are insured and or bonded and they are professionals.
When it comes to making sure there are no problems regarding the title, the title company will issue a title insurance policy that assures the lender that the title is clear of any problems which in turn assures you that the title is clear and clean. This does not mean that they could have missed something. It means that the title company is guaranteeing that if they missed something in their title search, they will fix or clear up the defect at their expense. In the last twenty-eight years as an active Realtors we have seen this happen twice.