FAQ's for First Time Buyers
So, you’re thinking about buying your very first home! Congratulations! It’s normal for your head to be swimming with questions. Here are a few frequently asked questions we receive that are more specific to our Oklahoma City market than what you usually read on Google.
What does a good Realtor do?
A good realtor will CARE!
Communicate. With you, your home buying team, and with the other Realtor & Seller.
Act in your interest. Listen to you, represent you, and be there for you during and after your purchase.
Respectfully guide you. Use our experience, provide constructive criticism, and help you achieve your goals.
Empower you. Providing you with resources, tools, market data, and educational material.
Learn more by reading about Our Vision.
Can’t I just use Zillow?
Zillow can be a great tool, but it isn’t always providing you with the best information. We see a lot of inaccurate listing information, scams, slow updates, and listings missing altogether. As Realtors®, we will provide you with a personalized search and app directly connected to the Oklahoma City Metropolitan Multiple Listings Service (MLS). Unless directly indicated by a Seller, all Realtors® are required to input their listing in the MLS so you can be sure that you’re getting the most up-to-date information. However, it may be a good place to browse for For Sale By Owner listings so send anything you find on Zillow that you may not have seen on the MLS and we will investigate it for you!
A lot of people may try to gauge what a home is worth based off of Zillow’s “Zestimate” feature. The Zestimate is based off of public record data. It is not an appraisal and is not necessarily indicative of the current value in today’s market. We can provide you with a Comparative Market Analysis and other resources to help determine a fair value.
Zillow generally shows an “estimated payment” on their website that doesn’t include taxes and insurance and could be misleading. Your whole payment is referred to as a PITI payment which stands for principal, interest, taxes, and insurance but Zillow usually only reflects the P&I payment.
How much does a Realtor® cost me?
What if we told you that you don’t pay us anything? In the state of Oklahoma, it is most common that the Seller pays both the Listing Realtor® and the Buyer’s Realtor®. You will have to pay half of the closing fees and associated lender costs including origination fees, appraisal fees, and “escrowed” costs in addition to your down payment. We can guesstimate what these costs may be for you and a lender can give you a solid estimate if you’d like to know approximately how much you’ll need to bring to closing. In exchange, the Seller pays their half of the closing fees and the Realtors® commissions. Keep in mind, though, that when it comes time to sell, you should factor in the cost of commissions to both sides.
What is an “escrow” anyway?
The escrow you most likely want to know about is the escrow account that your mortgage service company will maintain on your behalf. When you buy a home and aren’t paying 100% cash for it (who does that, anyway?!), the lender requires that you keep your insurance and taxes paid up. Similar to taking out a loan to purchase a car and the provider requires you keep full coverage during the term of the loan, the mortgage company will require insurance and taxes be maintained. In order to keep your payments from being all over the place, they have to set up your escrow account with initial balances. Typically, this means that they will collect anywhere from 12-18 months of insurance (paid in advance) and the year’s taxes (paid at the end of the year). The Seller will credit you at closing for their portion of taxes for the time they owned the home and you’ll escrow the rest. That way, your payment should stay about the same and the mortgage company will pay both taxes and insurance out of that separate savings account when they come due rather than you coming up with a bulk amount. Keep in mind that taxes and insurance may fluctuate and your payment may change on occasion but your principal and interest payments will ALWAYS stay the same.
What about first time buyer credits or closing cost assistance?
While there is currently no first time buyer tax credit, Oklahoma offers all kinds of great down payment assistance programs. Check with a few of our favorite lenders and be sure to ask them if you qualify for down payment assistance and how that may change your payment. If you qualify, this could dramatically decrease the amount of money you have to bring to closing. Even better, down payment assistance programs do not require that you pay it back if/when you move. However, it will most likely increase your interest rate.
As far as closing cost assistance, let us know if you need a home but aren’t sure you have enough money saved up to be all the way ready. While you have to pay for your own down payment (or use down payment assistance), we can negotiate that the Seller pay some or all toward your closing costs. This may mean that we don’t get the price of the home down quite as far as we’d like but if you’re maxing out your savings, it may be wise to work in some closing costs so you have a buffer for unexpected repairs, moving costs, utility deposits, etc.
What about new construction or homes For Sale By Owner?
We can most definitely help you in either scenario! There are a few things to be aware of, though.
With newly constructed homes, the builder is most likely not going to wiggle much on price. This is somewhat of a good thing, though. Paying their full asking price helps them establish the neighborhood value. If they give you $5,000 off the house and then the next person wants $5,000 off of that low price and the next person $5,000 off of that even lower price…all of a sudden, you’ve overpaid for your house and the neighborhood is showing depreciation. They are sticklers on price and that’s one of the reasons. However, that doesn’t mean we can’t help you navigate left-out items (garage door openers or fences for example), paying closing costs, and other items.
With For Sale By Owner homes, it’s our job to negotiate our own commission so don’t worry about that! It’s helpful to get a Realtor® involved to guide both sides through the transaction. This ensures that everything is done legally, fairly, and abides by the correct timelines to protect you. We will mediate between you and the Seller so you don’t feel pressured by them. One of the biggest issues we encounter with not having a Listing Realtor® involved is that the Seller may have overvalued their home. Of course everyone thinks their home is the best! We will make sure that you’re not overpaying by properly determining the home value and negotiating a fair deal for everyone.
Still have questions? Contact us!