Frequently Asked Questions

You've found your dream home, the seller has accepted your offer, your loan has been approved and you're eager to move into your new home. But before you get the key, there's one more step--the closing.

Also called the settlement, the closing is the process of passing ownership of property from seller to buyer. And it can be bewildering. As a buyer, you will sign what seems like endless piles of documents and will have to present a sizeable check for the down payment and various closing costs. It's the fees associated with the closing that many times remains a mystery to many buyers who may simply hand over thousands of dollars without really knowing what they are paying for.

As a responsible buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Although many of the fees may vary by locality, here are some common fees:

Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the beginning of your loan application process.

Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.

Loan Origination Fee: This fee covers the lender's loan-processing costs. The fee is typically one percent of the total mortgage.

Loan Discount: You will pay this one-time charge if you have chosen to pay points to lower your interest rate. Each point you purchase equals one percent of the total loan.

Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.

PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.

Prepaid Interest Fee: This fee covers the interest payment from the date you purchases the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.

Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance. At least one year advance plus two months worth of homeowner's insurance premium will be collected. In addition, taxes equal approximately to two months in excess of the number of months that have elapsed in the year are paid at closing. (If six months have passed, eight months of taxes will be collected.)

Recording Fees and transfer taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property.

Make sure you consult a real estate professional in your area to find out which fees--and how much--you will be expected to pay during the closing of you prospective home. Keep in mind that you can negotiate these costs with the seller during the offering stage. In some instances, the seller might even agree to pay all of the settlement costs.

Before the offer to purchase is created, it is very important that you have been at least pre-qualified or better yet pre-approved by a lender.

This is one of the best negotiating tools a buyer can have. It shows the seller that you are financially able to purchase the home. After you have found the right home, it is time to prepare the offer.

When you are buying a home, there are many problems that the seller is obligated to disclose. For example, in most states, it is illegal to withhold information about major physical defects on the property, but these disclosures don't always paint the entire picture of the home. Here are six questions you may want to ask that can offer additional insight about the prospective home before you make a final decision.

1) Why is the seller selling the house? This question may help you evaluate the "real value" of the property. Is there something about the house the seller does not like? If so, you may be able to adjust the purchase offer accordingly.

2) How much did the seller pay for the home? This question can, in some instances, help the buyer negotiate a better deal-maybe even get the seller to carry part of the loan. However, it is important to remember that the purchase price is influenced by several factors, like the current market value and any improvements the seller may have made to the home. The original purchase price might not have anything to do with the current value of the house.

3) What does the seller like most and least about the property? By asking the seller what he or she likes most and least about the property, you might get some interesting information. In a few cases, what a seller likes the most about a home might actually be something the buyer is looking to avoid. For example, if the seller describes his house as being in a "happening community," the buyer might consider this a negative factor because the area may be too noisy or busy for his or her taste.

4) Has the seller had any problems with the home in the past? It is also a good idea to ask the seller if he or she has had any problems with the home while living there. Has the seller had problems with a leakage from the upstairs bedroom in the past? If so, even if the leak has been corrected, the floor and walls around the bathroom might have been damaged. You should also check that these items were repaired properly.

5) Are there any nuisances or problem neighbors? Use this answer to find out about any noisy neighbors, barking dogs, heavy airplane traffic or even planned changes to the community, such as a planned street widening. This may give you insight on why the seller is really moving.

6) How are the public schools in the area? Because the value of a community is usually greatly influenced by the public schools in the area, finding out the buyer's perception can give you some insight about the quality of the area's schools.

Knowing all you can about a prospective home, not only helps you decide if it's the home of your dreams, but what offer to make as well. Your real estate professional can help you get your key questions answered and give you advice on how to evaluate your findings.

If you are a first-time home buyer, use the guide below for helpful hints and tips and learn how to avoid common mistakes when buying your first home in Greater Salt Lake, UT.


Pre-Qualification: Meet with a mortgage broker and find out how much you can afford to pay for a home.

Pre-Approval: While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. You'll also avoid being disappointed when going after homes that are out of your price range. With Pre-Approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you're interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan.

List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes - things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.

Representation by a Professional: Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller.

Focus & Organization: In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:
     • One or more detailed maps with your areas of interest highlighted.
     • A list or file of the properties that your agent has shown to you.
     • Paper and pen for taking notes as you search.
     • A camera to snap pictures of homes you have toured to help you remember your favories and features you really liked.

Visualize the house empty & with your decor: Are the rooms laid out to fit your needs? Is there enough light?

Be Objective: Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don't make a hurried decision that you may regret later.

Be Thorough: A few extra dollars well spent now may save you big expenses in the long run. Don't forget such essentials as:
     • Include inspection & mortgage contingencies in your written offer.
     • Have the property inspected by a professional inspector.
     • Request a second walk-through to take place within 24 hours of closing.
     • You want to check to see that no changes have been made that were not agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).

All the above may seem rather overwhelming. That is why having a professional represent you and keep track of all the details for you is highly recommended. Please contact us directly to discuss any of these matters in further detail.

Pricing your home is both an art and a science. Achieving the optimal price is the result of both objective research into comparable properties and a gut feeling about your property and the current market.

The right price should:
     •  Attract buyers
     •  Allow you to earn the most money possible
     •  Help you sell as quickly as possible

The simple fact is, price is the number one factor that most homebuyers use to determine which homes they want to view. And it's important to remember that, although the price is set by you, the value of the home is determined by the buyer. Try to avoid allowing your enthusiasm to impact your better judgment - overpricing is a common mistake that can cost you in the end.

The Importance of Proper Pricing
     •  Faster sale and less inconvenience
     •  Exposure to more buyers
     •  Increases Realtors® response
     •  Generates more advertising/sign calls
     •  Attracts higher offers
     •  Means more money to seller
     •  Avoids being "shopworn"

What really matters is how your home stacks up against the others currently offered for sale and recently sold in your neighborhood. Buyers will be comparing.

Common Reasons for Overpricing
     •  Over-improvement
     •  Need
     •  Purchasing in higher-priced area
     •  Original purchase price too high
     •  Lack of factual data
     •  Bargaining room
     •  Move isn't necessary
     •  Assessed value
     •  Emotional attachment
     •  Opinion of family and neighbors

Dangers of Overpricing
     •  Most of the activity on your home will occur in the first few weeks. Pricing a home properly and then creating immediate urgency in the minds of agents and buyers is critical.
     •  Buyers who have seen most available homes in their price range are waiting for the "right house" to come on the market. That's why if a house is priced right, it will sell quickly. The buyers are there waiting for it.
Don't start with a high price and the assumption that you can reduce it later. By the time you decide to lower the price, it may be too late, as interest will have alreadywaned.
     •  A major cause for concern is appraisal problems; overpricing can lead to loan rejections and lost time.
     •  Even if your home is nicer than other homes in the same area, your house won't be picked for viewing if you set the price too high.
     •  Buyers and agents become aware of the long exposure period and often are hesitant to make an offer because they fear something is wrong with the property.
     •  Attracting the wrong buyers.
     •  Fewer potentially qualified buyers will respond.
     •  You might help sell similar homes that are priced low.
     •  You could lose money as a result of making extra mortgage payments while incurring taxes, insurance and unplanned maintenance costs.

The Role of a Real Estate Agent in Pricing
     •  Provide you with a comparative market analysis (CMA), a comparison of the prices of recently sold homes that are similar in terms of location, style, and amenities. A CMAis performed by comparing previously sold homes in the area, and currently active homes to know your competition.
     •  There is no "exact price" for real estate
     •  We don't tell you what we think your home is "worth".
     •  The market determines value…together we determine the price.
     •  You determine the price based on the factors you control:
                - Marketing time
                - Financing alternatives provided
                - Condition
                - Exposure method
     •  Keep in touch with market trends and keep up to date with market activity of comparable homes.
     •  Estimate your net proceeds.
     •  Help to determine offering incentives.

An agent has NO control over the market, only the marketing plan. Never select an agent based on price.