Your Partner in Residential and Commercial Real Estate

Traditionally, the seller agrees to the commission that will be paid to the agent that is working for them. From there, once the listing is posted publicly on the Multiple Listing Network, the commission that agent will pay to a cooperating broker is posted. Essentially, this means that both buyer and seller agents are working for free until the deal is closed. The buyer will almost never write a check to pay a broker, and the agent working for the seller is paid out of the proceeds of the sale.

An earnest money deposit is referred to as the "good faith" deposit. When a buyer purchases a home, they will provide the seller's real estate company a deposit to hold in their escrow account. The purpose of this is to show a seller that you are serious about purchasing their home. It also acts as a way to protect the seller if the buyer backs out of the deal as a way to hold the buyer accountable.
If all goes smoothly in the buying process, at the closing table, the earnest money will be credited to either the buyer's down payment or closing costs.

Inspection – Inspection costs vary based on the area, size of the home, and the services the inspector is providing. For a standard home inspection for a condo in the city or a single-family just outside of it, a buyer should budget $400-600. Of course, other inspections require additional fees, so if you’re thinking about a lead inspection or pest inspection these will be additional.
Lender Costs/Fees (Appraisal, Credit Report, etc) – These fees are often lumped into your closing costs that are paid at the end of the transaction, but sometimes are charged up front. Expect to pay about $400-$600 for an appraisal.
Attorney/Legal Fees – Real estate attorneys traditionally charge a flat fee and do not charge by the hour. Expect to pay about $1,000-$1,200 for attorney fees, with some additional recording fees up to $500.
Downpayment – The downpayment is broken up into two deposits and a final payment. You’ll need to bind your offer with a deposit, typically $1,000-$5,000, but sometimes higher depending on purchase price and the situation. The same is true for binding the purchase and sale agreement, where the buyer will traditionally place the remainder of half the total downpayment amount into escrow as the second deposit. The remainder of the downpayment will be brought to closing as cleared funds, either via a wire into the attorney’s account or via a bank check. Any small adjustments at closing can be made via personal check. We traditionally speak of down payments as percentages (5% down, 10% down, 20% down, 30% down, etc). 

Most definitely! Home inspections, depending on your loan type, may even be required by your lender. However, even if it's not required it's probably one of the best, if not the most important, steps in the home buying process. It's always a great idea to get an inspection as a way to have peace of mind when making such a huge investment. It may turn out that there are only cosmetic things that need to be fixed, but it's best to make sure that there's nothing detrimentally wrong with the property. As the saying goes, "It's better to be safe than sorry."

A solid pre-approval can certainly give you the leg up on competing offers, so it’s important to be ready when it comes to working with a lender. In short, your pre-approval is the lender saying you can afford “x” after taking a quick glance at your financial situation. The majority of lenders will have very similar rates; however, a local lender on the ground in the area you’re looking in will likely be more competitive and better-known amongst agents, which surprisingly can have an impact on the pre-approvals credibility. You’ll also want to consider access to your mortgage banker throughout the process – a big question to ask is whether they are available on weekends (and whether you will be able to access them via cell phone!). In order to be best prepared for getting pre-approved, begin compiling the following items: 1) Tax returns for the past two years 2) Pay stubs for at least three months. If you are changing jobs or relocating, a copy of your offer letter. You’ll want to talk to your lender about your career change prior to a preapproval, as it may impact your ability to obtain a loan 3) Bank statements for the past three months 4) Other asset/income statements, such as 401k, retirement accounts, or real estate leases if you own investment property 5) If obtaining money from a third-party (friend or family member), a gift letter, which your lender can help you with 6) An idea of your credit score and monthly debts – student loans, car loans, etc will be used to calculate your debt-to-income, an important factor in mortgage lending 7) If you have a mortgage already, a couple of months statements may be needed by your lender 8) If you are divorced, a copy of your divorce decree and documentation of any child support or alimony may be necessary. Getting all of these items together in advance will help you and your lender be prepared. Many lenders, if given all of this information up front and authorized to pull your credit, will actually be able to pre-underwrite your loan, meaning that you will be approved as a buyer and they will simply need to “approve the home” via appraisal and if needed, a condo document review and verification of facts through a condo questionnaire. This can be a huge bonus and help you shine amongst multiple offers.