Having a simple understanding of important real estate concepts before you start the process of buying a house will give you serenity now and could save you a fortune in the future. Here are five real estate concepts you should know before you start looking for a new house. If you still have inquiries or are ready to start visiting homes, an Integrated Realty Group real estate agent would be glad to help.
Buyer’s Agent vs. Listing Agent
There are normally two agents involved when you buy a home; the “buyer’s agent,” who works for you, and the “listing agent,” who represents the home seller. Dual agency happens when there is only one agent for both sides, and it is something you want to avoid as much as you can!
When buying a home, you don’t pay your real estate agent – they’ll get a commission from the home seller. Choose a broker like Integrated Realty Group who has the lowest commissions.
Fixed Rate and Adjustable Rate Mortgages
Typical loans include “fixed rate” and “adjustable rate” mortgages. A fixed rate mortgage has a set interest rate throughout the entire loan; the most common ones are for 30 years. An adjustable rate mortgage has an interest rate that varies; the most common ones are for 5, 7, or 10 years.
Adjustable rate leases can make financial sense if you’re planning to sell or refinance your home before the initial period ends; but if you’re planning to keep your home longer than five years, it’s less risky to adopt a fixed rate loan. Make sure to hunt the best mortgage possible; this will save you a lot of money long term. Ask familiar faces and real estate agent for lender referrals.
Before you apply for a lease or even start looking for a house, you should get a pre-approval letter from the lender, which is an estimation of how much they’ll lend you. This letter will help you decide what you can afford and guarantees home sellers that you will be able to get credit whenever is needed.
When you go in for a pre-approval letter you should know clearly what the bank is offering. Ask them about closing charges, what fees are involved, what you’re getting for that price, and if they’ll set your loan at a particular interest rate. Note that if you end up competing for a home against other offers, it can help to have a local lender. Local lenders want continued referrals and care about their reputation; listing agents prefer to deal with them for this reason.
Real estate agents often refer to houses for sale as “listings.” A “listing” on a website shows information about the house, like the price, the number of bedrooms and location. Learn more about listings in the Orange County area.
For the most up-to-date listings, use sites from real estate brokers like Integrated Realty Group, rather than real estate portals. Brokers have access to the multiple listing services, which real estate agents are required to update, so the information is more accurate than nonaffiliated sites with a brokerage. In a competitive market, you can lose a good deal if you use sites that don’t show all the homes for sale.
Watch a video about mortgages.