FAQ - Silicon Valley Home Buyers
- Should I get pre-approved before I start looking for a home? It is to your advantage to be preapproved prior to writing an offer but yes you can start looking while the preapproval process is being done. It is actually recommended to preview homes to educate yourself on what you can get for the different price ranges and get a sense of the health of the market. Keep in mind that if do find a home that you are interested and have yet to be preapproved for a loan then you are not yet in a strong position to purchase in the eyes of the seller. You can still write an offer without a completed preapproval letter but it is highly recommended that you get full loan pre-approval before writing an offer on a home.
- How much home can I afford? What you qualify for and what you are comfortable spending are often different There are other monetary items to consider when owning a home besides the mortgage such as home maintenance costs. First get loan preapproval and then estimate the monthly costs of owning home above the mortgage payment.
- How much downpayment do I have to put down? There are loans that you may qualify for that you can put less than 20% down so talk to your lender about your options. But 20% down will give you the most loan options and avoid possible PMI (private mortgage insurance) payments. Check with your lender to see what downpayment amount makes sense for you.
- How do commissions work? It used to be that home sellers would always cover the sellers broker commission and the buyers brokers commission and often times they still do but now buyers brokers commisssions have to be negotiated in the purchase agreement. If you want a real estate agent to represent you then you will be asked by that real estate agent to sign a Buyer Representation Broker Compensation Agreement which states that you agree to pay that agents broker a commission for their representation. The buyer's agent will typically ask in the purchase agreement that the seller pay the buyer's broker fee and at that time the seller will accept, reject or counter that term.
- What should I budget for closing costs? Your lender will disclose closing cost associated with the loan and your realtor will go over potential closing cost that you will be negotiating in the purchase offer. There are customary who pays what closing costs depending on what city and county the sale is but closing costs are negotiable. Having said that some sellers are not happy to see buyers asking the sellers to pay for closing costs that are customarily paid by the buyer. An estimate of closing costs should be done at the outset of buying process.
- When do I have to wire my initial deposit to the title company? That will be contractually agreed upon in the purchase agreement. In Silicon Valley it is very common that the listing agent relays to buyers agents prior to writing the offer that the seller prefers that the initial deposit be wired within one business day after acceptance. Wiring the initial deposit funds one or two business days after acceptance is common.
- Should I buy now or wait for interest rates to come down? Timing the market is difficult because the market is somewhat unpredictable. Every biuyers situation and needs vary so you have evaluate your situation.Sometimes there are indications that interest may be coming down soon so buyers that can afford to wait do wait but keep in mind that if interest rates do drop significantly then buyer demand may rise and you may be competing in a hotter seller's market meaning possible multiple offers on homes.
- How do you recommend we do our home search? There are multiple sites like zillow, homes.com, realtor.com where you can view homes that are on the public market and you can start there. But these sites do not show some homes for sale like private exclusives and off market opportunities. I would recommend getting on and off market listing alerts from a realtor that you want to work with. This realtor can set up private viewings, request disclosures for you and give their opinon on the home.
- Where do I shop for homeowner insurance? Researching homeowners insurance for a specific property needs to be started early by reviewing the disclosures and asking your insurance agent questions about the property. if you do not know an insurance agent then your realtor or lender may have a referral for you. Getting insurance on certain properties can be difficult and expensive so sometimes we need to write an insurance contingency in the offer for those properties.
- Should i get my own home inspections even though the seller has provided me with their inspections? If you are not satisfied with the inspections provided by the sellers then absolutely yes and it is also recommended that you have a property contingency on the offer. Often times buyers do not write a property contingency in offers even when they are not confident in the property condition because they are afraid of getting their offer rejected especially when competing in multiple offer situation in a hot sellers market. Sometimes it is a difficult decison because the buyers do not want to lose getting home so they take the risk of writing non-contingent offers. Buyer receive advisories about non contingent offers, discuss with your realtor what it means to write a non contingent offer.
- How do we determine how much to offer? Before writing an offer you should review comparable listings of active, pending and recent solds, review the disclosures and review an estimated buyers statement showing estimated closing costs with your realtor. Are you comfortable with your offer price, will there be an appraisal issue, are there other terms in the offer that are acceptable to you and that may enhance the offer? Ultimately it is up to the buyer to determine how much to offer
- What kind of contingencies can we put in our offer? Common contingencies options in purchase agreements in Silicon Valley are loan, appraisal, property, insurance, approval of seller disclosures, preliminary title report, review of HOA documents, review of leased or liened items and sale of buyer's property. Discuss with your realtor what contingencies you may consider including in your offer.
- How do we make our offer stand out in a multiple offer situation? Price offered is of course a primary concern but there are terms that you can offer that may make the offer more attractive to the seller. Prior to writing an offer your agent should ask the listing agent if there are certain needs that the seller has that can be addressed in the terms of the purchase offer. As a buyer you will have to decide if there are terms you can provide that may enhance the offer and still be acceptable to you as well. Terms like a seller rent back, quick close and limit the number of contingencies (disuss contingency removal or non contingent offers with your realtor) are just a few examples. Sometimes a seller will state that they are open to looking at "strong offers or premptive offers" prior to the offer date. Ask your realtor if the seller will look at a preemptive offer.
Call Rene or click the link below if you further questions.
https://forms.gle/VPEBXmLD61W3h5mr7
South Bay Area Service Areas Covered
Los Altos, Los Altos Hills, Los Gatos, Saratoga, Monte Sereno, San Jose, Campbell, Cupertino, Sunnyvale, Santa Clara,
- Should I get pre-approved before I start looking for a home? It is to your advantage to be preapproved prior to writing an offer but yes you can start looking while the preapproval process is being done. It is actually recommended to preview homes to educate yourself on what you can get for the different price ranges and get a sense of the health of the market. Keep in mind that if do find a home that you are interested and have yet to be preapproved for a loan then you are not yet in a strong position to purchase in the eyes of the seller. You can still write an offer without a completed preapproval letter but it is highly recommended that you get full loan pre-approval before writing an offer on a home.
- How much home can I afford? What you qualify for and what you are comfortable spending are often different There are other monetary items to consider when owning a home besides the mortgage such as home maintenance costs. First get loan preapproval and then estimate the monthly costs of owning home above the mortgage payment.
- How much downpayment do I have to put down? There are loans that you may qualify for that you can put less than 20% down so talk to your lender about your options. But 20% down will give you the most loan options and avoid possible PMI (private mortgage insurance) payments. Check with your lender to see what downpayment amount makes sense for you.
- How do commissions work? It used to be that home sellers would always cover the sellers broker commission and the buyers brokers commission and often times they still do but now buyers brokers commisssions have to be negotiated in the purchase agreement. If you want a real estate agent to represent you then you will be asked by that real estate agent to sign a Buyer Representation Broker Compensation Agreement which states that you agree to pay that agents broker a commission for their representation. The buyer's agent will typically ask in the purchase agreement that the seller pay the buyer's broker fee and at that time the seller will accept, reject or counter that term.
- What should I budget for closing costs? Your lender will disclose closing cost associated with the loan and your realtor will go over potential closing cost that you will be negotiating in the purchase offer. There are customary who pays what closing costs depending on what city and county the sale is but closing costs are negotiable. Having said that some sellers are not happy to see buyers asking the sellers to pay for closing costs that are customarily paid by the buyer. An estimate of closing costs should be done at the outset of buying process.
- When do I have to wire my initial deposit to the title company? That will be contractually agreed upon in the purchase agreement. In Silicon Valley it is very common that the listing agent relays to buyers agents prior to writing the offer that the seller prefers that the initial deposit be wired within one business day after acceptance. Wiring the initial deposit funds one or two business days after acceptance is common.
- Should I buy now or wait for interest rates to come down? Timing the market is difficult because the market is somewhat unpredictable. Every biuyers situation and needs vary so you have evaluate your situation.Sometimes there are indications that interest may be coming down soon so buyers that can afford to wait do wait but keep in mind that if interest rates do drop significantly then buyer demand may rise and you may be competing in a hotter seller's market meaning possible multiple offers on homes.
- How do you recommend we do our home search? There are multiple sites like zillow, homes.com, realtor.com where you can view homes that are on the public market and you can start there. But these sites do not show some homes for sale like private exclusives and off market opportunities. I would recommend getting on and off market listing alerts from a realtor that you want to work with. This realtor can set up private viewings, request disclosures for you and give their opinon on the home.
- Where do I shop for homeowner insurance? Researching homeowners insurance for a specific property needs to be started early by reviewing the disclosures and asking your insurance agent questions about the property. if you do not know an insurance agent then your realtor or lender may have a referral for you. Getting insurance on certain properties can be difficult and expensive so sometimes we need to write an insurance contingency in the offer for those properties.
- Should i get my own home inspections even though the seller has provided me with their inspections? If you are not satisfied with the inspections provided by the sellers then absolutely yes and it is also recommended that you have a property contingency on the offer. Often times buyers do not write a property contingency in offers even when they are not confident in the property condition because they are afraid of getting their offer rejected especially when competing in multiple offer situation in a hot sellers market. Sometimes it is a difficult decison because the buyers do not want to lose getting home so they take the risk of writing non-contingent offers. Buyer receive advisories about non contingent offers, discuss with your realtor what it means to write a non contingent offer.
- How do we determine how much to offer? Before writing an offer you should review comparable listings of active, pending and recent solds, review the disclosures and review an estimated buyers statement showing estimated closing costs with your realtor. Are you comfortable with your offer price, will there be an appraisal issue, are there other terms in the offer that are acceptable to you and that may enhance the offer? Ultimately it is up to the buyer to determine how much to offer
- What kind of contingencies can we put in our offer? Common contingencies options in purchase agreements in Silicon Valley are loan, appraisal, property, insurance, approval of seller disclosures, preliminary title report, review of HOA documents, review of leased or liened items and sale of buyer's property. Discuss with your realtor what contingencies you may consider including in your offer.
- How do we make our offer stand out in a multiple offer situation? Price offered is of course a primary concern but there are terms that you can offer that may make the offer more attractive to the seller. Prior to writing an offer your agent should ask the listing agent if there are certain needs that the seller has that can be addressed in the terms of the purchase offer. As a buyer you will have to decide if there are terms you can provide that may enhance the offer and still be acceptable to you as well. Terms like a seller rent back, quick close and limit the number of contingencies (disuss contingency removal or non contingent offers with your realtor) are just a few examples. Sometimes a seller will state that they are open to looking at "strong offers or premptive offers" prior to the offer date. Ask your realtor if the seller will look at a preemptive offer.
Call Rene or click the link below if you further questions.
https://forms.gle/VPEBXmLD61W3h5mr7
South Bay Area Service Areas Covered
Los Altos, Los Altos Hills, Los Gatos, Saratoga, Monte Sereno, San Jose, Campbell, Cupertino, Sunnyvale, Santa Clara,
Contact
Rene David Martinez
Licensed Real Estate Broker / Realtor
License #01250176
Compass
408-410-6645 (cell phone)
rene.martinez@compass.com
Licensed Real Estate Broker / Realtor
License #01250176
Compass
408-410-6645 (cell phone)
rene.martinez@compass.com
Silicon Valley Office
DRE#
750 University Ave. Suite 150
Los Gatos, CA 95032
