This is really a two part answer. First as a buyer, you’ll need to know how much you can afford and comfortably spend. This ensures your financial costs are understood before beginning to shopping for the right fit home. Secondly, all sellers are going to review their offers and want to vett the buyers ability to actually close. Many offers without pre-approval letters won’t even be accepted by seller.
All good agents should have a resource of reputable lenders for you to interview and compare costs. The lenders will need some basic financial information to start the process. Each lender will give you a specific list and the process starts with a quick, 10 min phone call or online application. The lender will need to check your credit rating and remember this is a time to be careful with your finances. Don’t quit your job or make large purchases during this time as the lender will need to verify your debt to income ratio and this could impact it.
Agents are educated to look out for their clients best interests throughout the home buying process. There are many pitfalls that can easily be avoided with an experienced realtor. From negotiating the best price, to protecting your earnest money throughout deadlines, to inspections/repairs, and clear title transfer, a great agent can alleviate much of the stress when purchasing a home.
Most of the time, the buyer agent’s commission is already established when a home is listed on the MLS and will be paid for by the seller.
Earnest Money is an amount of money a buyer puts down to submit with an offer. In order for a contract to become legally binding, the agreement requires consideration, or in other words earnest money. For a strong offer, we usually recommend at least 1% of the purchase price. The earnest money is held either at the Buyer Agent’s brokerage or a title company. Earnest money can be refundable or non refundable depending on the contract terms and deadlines, this is another reason having a good agent watch out for your interests. At closing, earnest money will be credited toward the Buyer’s closing costs or downpayment.
Once a buyer is under contract, they usually have about 2 weeks to perform any inspections on a home that they deem necessary and at their cost. We usually recommend a buyer have an inspection performed by a licensed inspector during the due diligence period. The inspector will alert you to any potential problems that you may want to have investigated further. Once inspections are completed, the repair negotiation process begins.