Q: Does it cost me money to work with an agent?
A: Typically, no. Most homes you see include some type of commission that is built into the price. This even applies to many FSBO homes.
Q: When should I get prequalified?
A: Ideally, before you start searching (strongly recommended). Even if you have bought before and feel confident about your ability to get prequalified, getting this out of the way first will avoid anything unexpected down the road, and allow you to jump on a hot property with the strongest offer possible.
Q: Am I wasting my agent’s time looking at a bunch of homes?
A: No! If you are genuinely interested in finding a home, and are reasonably wading through the options, you are not wasting your agent’s time – even if it takes a lot of homes and a long period of time to find what you’re looking for! This is what we do. This is our job. An agent who gets frustrated because you’re not jumping on one of the first properties could be a red flag that you’re working with the wrong person.
Q: If I own a home, can I submit an offer without selling first?
A: Technically, yes; but it may not always be the best option. If you have to sell your current home before closing on a new one, submitting an offer without first having an accepted offer on your current home tends to weaken your offer. With a weak offer (the seller is going to take their home off of the market in the hope that yours sells), you’ll tend to get the raw end of the stick in negotiations – i.e. you’ll often lose money.
You may be able to qualify for the purchase of a new home without selling your home first. Unless you are going to rent it out to cover the payment, this may or may not be a good idea, and you could easily get stuck with two home payments for awhile. It tends to work best to:
a) Sell your home and find transitional housing while searching for a new home (yes, I know this can be a pain), or,
b) Put your home up for sale, secure an offer, and then place an offer on a new home, contingent on the closing of an existing contract (a much stronger negotiation offer).
Q: What about foreclosures and fixer uppers?
A: Foreclosures and fixer uppers can provide awesome opportunities, but there’s a little bit more too it.
First, out of all homes sold in Anchorage, Eagle River, Wasilla, and Palmer in the last twelve months, foreclosures made up 0.3% and fixer uppers made up 0.34% of the total. Combining that with the fact that, after years of fix-and-flip prosperity seminars and HGTV shows, everybody is out to get the good deals, you can see why there’s a lot of competition on the handful of legitimately good deals out there. The secret is to get notified as soon as a home hits the market, jump on it quickly, and make an offer asap (with a built-in inspection period) if it’s a good deal. Sometimes banks hold off offers for a period of time to maximize exposure, and in this case, if it’s a good deal, you’ll be competing with other offers.
Second, many fixer uppers and foreclosures are not bank financeable, at least through the normal routes. Unless the home is reasonably finished, appraisers will require repairs. Banks holding foreclosures are usually not willing to make repairs, and many sellers want an “as-is” price. The solution, outside of finding a foreclosure that is in financeable condition, is either to pay cash, or pursue a “rehab loan.” Rehab loans allow a buyer to finance in repairs, upgrades, and even additions to be completed after the property closes. There’s a bit to the process, and the interest rate tends to be higher, but this can be a great way to purchase a property that otherwise is unfinanceable.
This is just a start to some FAQs, but hit me up on my Facebook page, by phone or e-mail, and I’d be happy to answer more!
Advantage Alaska Real Estate
Serving Wasilla, Palmer, Eagle River, & Anchorage Alaska!
“Your home sold in 90 days, or I’ll sell it for free!”