In order to get the best price for the home we want to buy, should we write a "low-ball" offer?
This is not usually the best strategy. You will generally get a seller to negotiate more on the price of their home by making a reasonable offer, as opposed to offering well below the market value of the house. If you offer too low you may offend the sellers and make them less likely to negotiate on price. An offer is not all about price. The terms of an offer have a lot to do with how acceptable it is to the seller. Closing costs, closing date, inspections, financing, and repairs are just some of the items that need to be considered when writing a real estate offer. Your REALTOR® will advise you during the contract process.
What is the difference between an inspection and an appraisal?
The main difference between an inspection and an appraisal is that an appraisal is done to determine if the purchase price meets the market value of the home and the inspection is done to determine the overall condition of the property. An appraiser, who is from an unbiased third party company assigned by the lender, will look at recently sold properties of similar style, size and location to determine if the parties involved are getting fair market value for the property. An appraiser does consider the overall condition of the home, but does not do an in-depth inspection of the homes components. Like an inspector, the appraiser does visit the home to do the appraisal. The buyer and the lender then receive a copy of the detailed appraisal report. An inspector will spend 3-4 hours doing a physical evaluation of the property to determine its condition and create a lengthy report of their findings for the buyer. They will advise the buyer on particular areas of concern and may suggest further evaluation by other licensed contractors. The buyer will work with their REALTOR® to determine if they should ask for certain repairs to be done by the seller during the inspection period. Both the appraisal and the inspection are paid for by the buyer at the time they are performed.
What are the different loan types I can choose from when getting a mortgage?
There are many different types of loans available to buyers looking to purchase a home. Speaking with a qualified mortgage lender is the first step in understanding which loan type best fits your needs! The loan type that fits you best will be determined by a variety of factors including your credit score, income, and down payment funds available. Loan availability can change with market conditions but here are a few of the most common types of loans:
Adjustable and fixed rate mortgages, meaning you can have an interest rate that can fluctuate over time or you can have a fixed interest rate for the life of your loan. A lender can explain the pros and cons of each.
Government-insured loan types, including FHA, VA and USDA. Each loan type has specific guidelines for qualification that your lender can walk you through.
Conventional loan products - A conventional home loan is not insured or guaranteed by the federal government in any way. You have several options for down payment amount and whether you will pay mortgage insurance or not is based on the amount of down payment you choose.