Real Estate FAQs

Q: What is the difference between a listing agent and buyers agent?

A: A listing agent represents the seller and the buyers agent represents the buyer. However, any real estate agent can serve in either role depending on the clients needs, or he/she can serve in both rolls under dual agency.

 

Q: Do you dig deep and buy a dream home or settle for a starter home?

A: Choosing between a smaller house in an affluent neighborhood, an older , bigger house in a more working-class community or a brand new home is not easy. If you’re in this situation, start by examining your priorities and asking the following questions:

• Is the surrounding neighborhood or the home its self the most important consideration?
• Is each of the neighborhoods safe?
• Is quality of schools an issue?
• Do any of the areas seem to attract more families with children or adult residents?
• As for return on your investments, home price appreciation is hard to predict.

 

Q: What can I afford?

A: Know what you can afford is the first rule of home buying, and depends on how much income and how much debt you have. In general, lenders don’t want borrowers to spend more than 28 percent of their gross income per month on a mortgage payment or more than 36 percent on debts.

 

Q: What’s my house worth?

A: A home is ultimately is worth what someone will pay for it. Everything else is an estimate of value. To determine a property’s value, most people turn to either an appraisal or a comparative market analysis.

 

Q: What is the difference between market value and appraised value?

A: The appraised value of a house is a certified appraiser’s opinion of the worth of a home at a given time. Market value is what price the house will bring at a given point of time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker.

 

Q: How do you qualify as a first time home buyer?

A: In general, lenders define a first time home buyer as someone who has not owned any real estate - whether a personal residence, vacation home or investment property - during the past three years.

 

Q: In real estate, what are 1031 exchange properties?

A: A 1031 exchange properties can be found under section 1931 of the Internal Revenue Code. It states that the tax payer can replace his/her property with the replacement purchase of like kind property on a tax deferred basis.

 

Q: What is Fannie Mae’s low down program?

A: Fannie Mae is expanding the availability of low down-payment loans in an effort to help more people nation wide qualify for a mortgage. Two new programs will help potential buyers overcome two of the most common obstacles to home ownership, low savings and a modest income.

To address many first time buyers’ struggles to save the down payment, Fannie Mae developed Fannie 97. The program provides 97 percent financing on a fixed rate mortgage with either 25 or 30 year loan term through Fannies Mae’s Community Home Buyers Program.

Fannie Mae’s new Start-Up Mortgage will assist buyers with a 5 percent down payment who are at any income level. Yet applicants do not need as much income to qualify and less cash for closing than with tradition mortgages. Borrowers will receive a 30 year, fixed rate mortgage with a first year monthly payment that is lower than the standard fixed rate loan.

 

Q: What are VA programs?

A: Veterans Administration loans, which are available to veterans, reservists and military personnel, are attractive because the buyer is not required to make a down payment. The maximum loan amount the U.S. Department of Veterans Affairs will insure varies by region. There is no restriction on the purchase price as long as you have the cash to make up the difference between the loan amount and the purchase price.

 

Q: What do all those real estate acronyms in the ads mean?

A: See below.

assum. fin. - assumable financing

dk - deck

gr - garage

FDR - formal dining room

Fp, frplc, fplc - fireplace

grmet kit - gourmet kitchen

HDW, HWF, Hdwd - hardwood floors

pvt - private

pwdr rm - powder room or half bath

upr - upper floor

vw, vu, vws, vus - views