Buying a Home - Frequently Asked Questions
- What are the advantages of having a Realtor help me buy a home?
- How can I find out how much I can afford to pay for a home?
- How does buying compare to renting?
- How much of a down payment will I need to buy a home?
- What are the steps involved in the loan process?
- What are typical closing costs?
- When I start visiting homes, what should I be looking for the first time through?
- How can I find out what homes have sold for in the area I'm considering?
- When I find the home I like, how do I make an offer?
- What does a home inspector do?
- Can my Realtor help me with my moving plans?
- Do I have to use an attorney?
- Is there any way to protect myself against emergency repair bills in my new home?
- What should I look for during my final walk-through?
- What will happen on closing day?
- What are the advantages of having a Realtor help me buy a home?
A Realtor is prepared to help you make informed decisions, educate you to the marketplace, provide you with financing information, prepare contracts on your behalf and lead you through the negotiation process. Having the wisdom and counsel of someone who knows the current real estate market and represents your interests saves you thousands of dollars and smoothes the process along the way.
- How can I find out how much I can afford to pay for a home?
Talk with your real estate agent. A good agent is committed to helping you find the right home, and will assist you in determining an affordable price range. There are many loan options available today, including low down payment loans. Your Burgdorff ERA sales associate can direct you to ERA Mortgage for mortgage prequalification*, or your can use the helpful link here at the burgdorff.com Web site.
* Affiliated Business Arrangement Disclosure
Thank you for contacting us, your local Burgdorff ERA office, in connection with the purchase or sale of a home or other property. This is to inform you that Burgdorff ERA has a business relationship with the companies listed in this Statement, in that each of the companies is wholly or partially owned by Burgdorff ERA or by Cendant Corporation. Cendant Corporation has an equity interest in NRT Incorporated, the ultimate parent of your local Burgdorff ERA office, and other brokerage offices throughout the nation. Cendant owns the franchises of the ERA®, CENTURY 21® and COLDWELL BANKER® systems. Because of these relationships, the referral of business to those companies may provide us or other related parties noted herein a financial or other benefit. We will not be paid a referral fee as a result of any referral to non-real estate brokerage companies.
We have set forth below the full range of services that these companies provide, along with an estimate of the range of charges generally made for these services. You are NOT required to use the listed companies as a condition of the purchase or sale of your property. THERE ARE FREQUENTLY OTHER SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO RESEARCH OTHER OPTIONS TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST FINANCIAL OPPORTUNITIES FOR THOSE SERVICES.
 COMPANIES ERA Mortgage Co.
Provides a full range of residential first mortgage loan products and services.
NRT Title Agency, LLC
Based upon a search of public records, this service brings to your attention any known problems with the property's title before closing, and insures against loss due to certain title defects. Different types of coverage are available at different rates.
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HUD-1
DESCRIPTION/LINE
DESIGNATION Loan origination fee/ (801)
Loan discount fee/ (802)
Application fee/(800) Series
Purchase of owner's or lender's policy (1108-1110) for:
- $100,000 home
- $250,000 home
- $500,000 home
Purchase of lender's simultaneously issued policy
Search and examination
Miscellaneous endorsements and New Jersey closing service letter |
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| ESTIMATE OF RANGE OF CHARGES GENERALLY MADE BY PROVIDER1 0-2% of loan amount
0-5% of loan amount2 $0-3503
$425 - $525
$913 - $1,125
$1,770 - $2,180
$25
$150 - $200
$125 - $150
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1. Actual charges may vary according to the particular circumstances underlying the transaction, including the home value, coverage and limits, other requested terms and services, unusual market conditions, government regulations, property location and features, and other similar factors. Rates may not be the lowest available and are subject to change. For a free, no obligation quote, please contact the company directly. Where required by state law, current rates for insurance are filed with the applicable state agency, and depending upon the circumstances, may vary from the rates shown above.
2. The loan discount fee/points are affected by the note rate. Depending upon market conditions, the loan discount fee/points may be higher to adjust for below market rates.
3. There are other charges imposed in connection with mortgage loans. If you apply to this company for a loan, you will receive additional information regarding anticipated charges.
In addition, although not affiliated business arrangements, please note the following: Burgdorff ERA markets the AON® Home Warranty as the ERA Home Protection Plan and ADT® Security Services, as well as other products and services. Burgdorff ERA or its affiliate(s) may receive a financial or other benefit as the result of that referral.
- How does buying compare to renting?
Renting offers you a basically maintenance-free lifestyle, with few unexpected repair bills. It does not offer any protection from rent increases, little tax benefit and no growth in equity. Homeownership offers tax deductions to offset real estate taxes, and loan interest points. In addition, most homes appreciate in value over time.
- How much of a down payment will I need to buy a home?
The down payment is a percentage of the loan-to-value ratio (the lesser of the sales price or the appraised value) that the lender is willing to lend. For example, if a property appraises for $100,000 and the lender's loan-to-value ratio is 90%, the down payment is $10,000. Conventional financing usually requires 20% down, but there are many programs available that an adapt to your financial profile.
- What are the steps involved in the loan process?
When you first decide to look at properties, it's a good idea to speak with a mortgage counselor and obtain a pre-approval letter, which in most cases is the final step in a complete mortgage commitment. In many cases the remaining condition is the satisfactory appraisal on the property you actually purchase. The lender commits to financing your home and indicates the total mortgage amount available to you using basic information and electronic credit reporting.
When you apply for a mortgage, you will need to provide documentation regarding your income, expenses and obligations. This documentation typically includes your two most recent pay stubs, W-2's for the past two years, last two months' bank statements and long-term debt information (credit cards, auto loans, etc.)
- What are typical closing costs?
Typical closing costs for a buyer include the application fee, private mortgage insurance (when borrowing with less than 20% down payment), fee paid to lenders for the appraisal and attorney review, inspections, homeowner's insurance, flood insurance (if required), title insurance, survey, attorney fee, recording/filing fees, and escrows (as required by the lender).
Typical closing costs for a seller in New Jersey include the realty transfer fee, which is based on the contract of sale price, attorney fee, and recording/filing fees.
- When I start visiting homes, what should I be looking for the first time through?
Take some time to observe and feel your first impressions. As you walk through a home, look everywhere! Examine cabinets, closets and the basement storage areas. Make notes of the homes that appeal to you. It's easy to forget details and you will be pleased to have some reminders at the end of the day.
- How can I find out what homes have sold for in the area I'm considering?
When you have narrowed your search, your buyer agent can research current comparable sold and deposited properties, as well as the current active comparable properties.
- When I find the home I like, how do I make an offer?
The offer you formulate needs to include the price you are willing to pay, the closing date, inspections you want to have, mortgage information, items included and excluded, and any other contingencies to the sale. At the time the offer is written, you will need to provide earnest money. The money represents your sincerity in the attempt to purchase the property. If the offer is accepted, the earnest money becomes part of your initial deposit and is placed in an escrow account until closing. It can be used as a component of your down payment. If your offer is not accepted, your earnest money is fully refunded. You should anticipate an earnest money deposit of $1,000, though marketplace tradition may vary.
- What does a home inspector do?
The home inspector's role is to make you aware of repairs that are necessary or recommended. All systems of the home you are buying are to be in "normal working condition" at closing. It is wise to have all components of the home inspected during the contract inspection contingency period. This inspection can include the roof, plumbing, electrical, heating and ventilation, air conditioning, foundation, attic, bath and kitchen appliances. A separate pest inspection is required by the lender if you are mortgaging the property. Other recommended tests include the oil tank, soil tests, lead, radon, water, well, EMF (electromagnetic field), mold spores, asbestos and septic. Burgdorff ERA recommends that you use an ASHI certified inspector.
- Can my Realtor help me with my moving plans?
Yes. Realtors are quite knowledgeable about the entire process and will be more than willing to offer guidance. At Burgdorff ERA, we offer extended assistance through our Select Lifestyle Services to help our clients with utilities disconnects and connects, reputable contractors and other service providers. You may use this Web site to investigate those services.
- Do I have to use an attorney?
No. However, at Burgdorff ERA we encourage you to use a New Jersey attorney with real estate experience in our state. All signed real estate contracts in New Jersey are subject to a three-day attorney review period. Both buyers and sellers have the right to have an attorney review the contract. During the review period, either attorney can cancel the contract on behalf of his or her client for any or no reason.
- Is there any way to protect myself against emergency repair bills in my new home?
Home warranties can protect you against costly repairs not covered under your homeowner's insurance. At Burgdorff ERA, we provide our buyer clients with the opportunity to purchase an ERA Home Protection Plan on any residential property selected. The home warranty covers selected working components of your property during the first year you are in your home.
- What should I look for during my final walk-through?
You should inspect any work the seller agreed to have done as a result of your home inspection. In addition, you should check to make certain anything that should have been removed or included in the sale has been accomplished. Any problems should be brought up at the closing.
- What will happen on closing day?
Prior to taking possession of your new home, you will attend the "closing" meeting, usually with buyers, sellers, attorneys for both parties and the listing and selling sales associates present. Your attorney will explain all legal documents, including the deed of trust or mortgage before you are asked to sign. You will be asked to remit any outstanding balance of the down payment, mortgage interest and unremitted closing costs with a certified or cashier's check. You will receive title to the property, which will then be recorded, and keys.
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