You ask, we answer.
We get a lot of questions on a daily basis here at the office. We decided to start a new blog series where we answer common questions that we receive from buyers, sellers, and agents. If you have a question you would like answered, leave it in a comment below to be featured in the next Q&A blog.
Q: WHAT IS CLOSING COVERAGE? A: All title companies are required to offer closing coverage protection. This usually runs from anywhere between $20 and $55. This is essentially insurance that protects buyers and sellers from title companies stealing money from them through fraud, theft, or anything else that would result in closing related funds not being properly disbursed. It is an individual’s decision for whether or not they will choose to pay for closing coverage protection.
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Q: SHOULD I USE A BUYER’S AGENT? A: A buyer’s agent is a Real Estate Agent that specializes in representing the buyer, and the buyer only. This means that the Agent will always have the buyer’s best interest in mind. This cannot necessarily be said for an agent who is representing the seller and the buyer. Ask yourself: would you want to risk all of your information being shared with a seller by having the same agent as them? Using a buyer’s agent will also save you a lot of time because they will be the ones actively seeking homes and scheduling showings for you.
Q: WHAT IS AN ESCALATION CLAUSE? A: An escalation clause is when a potential buyer tells the seller they will offer a predetermined amount more than what the opposing buyer is offering; up to a certain price. An example would be saying they will put in an offer $10,000 more than the opposing offer, up to $240,000. Mike Ferrante of the 21 Mike Team from Century 21 HomeStar suggests that this may not be the best route to take because then the seller knows your highest offer. He recommends just going in with your best offer instead of proposing an escalation clause.
Q: SHOULD I GET A PRIVATE HOME INSPECTION? A: The simple answer is yes! Think of it as spending a small fee in order to protect a large investment you will be making. Although your Realtor may be highly trained and experienced, you cannot rely on him or her when it comes to home inspections. You should leave it up to a trained home inspector that will take their time to do a thorough inspection on your home so that no potential problem goes unnoticed. There are three options after the home inspection results are available. The first option would be to go through with the deal if you are happy with the home and the turnout. The next option would be to discontinue the offer in the event that the home inspection did not go well. Or, as an alternative to walking away, you can request that the seller make repairs.
Q: WHAT IS A PRE-FORECLOSURE? A: A pre-foreclosure typically takes place when a homeowner has stopped making payments on the house. The bank then begins steps towards foreclosure by issuing a foreclosure notice to the resident. During this time, the house is not open to be shown to potential buyers by Agents. However, Real Estate sites like Zillow will advertise these homes as listings in order to drive traffic to their platform.
Ask a question to be featured in the next Q&A series!