Is it a good time to buy a house?
The answer depends on your personal situation and what "good" means to you. Right now, interest rates are higher compared to the historically low rates we saw during the COVID years. However, it’s important not to be swayed by alarmist headlines or social media posts from so-called experts. During the pandemic, buyers were often paying above asking price, and it was common to face intense competition without receiving any seller concessions.
Today, the market is more balanced, and many sellers are willing to offer concessions, such as covering some of your closing costs or even providing a rate buy-down to help offset higher mortgage rates. So, while rates might be higher, there are other advantages that can make it a good time to buy, especially if you are well-prepared and looking for a home that suits your needs.
It’s also worth considering that when interest rates eventually dip, the demand for homes could increase, potentially shifting the market back into the seller's favor. If you’re ready to buy now, you may be able to lock in a good deal before that happens. The right time to buy is when your personal circumstances align with your goals—whether that's finding your dream home or making a sound investment.
I can help you navigate the current market and strategize the best approach for your home search. Let's discuss your goals and create a plan tailored to your needs.
How much house can I afford?
Determining how much house you can afford depends on several factors, including your income, monthly expenses, and the type of loan you qualify for. Lenders use debt-to-income (DTI) ratios to assess how much you can afford to borrow. Here’s a breakdown of the typical DTI guidelines for different loan types:
VA Loans: For Veterans Affairs (VA) loans, the maximum DTI ratio is typically 41%, but this can vary depending on other factors like credit score and residual income (what’s left after all monthly obligations).
FHA Loans: The Federal Housing Administration (FHA) usually allows a DTI ratio of up to 43%, but again, this can vary based on your credit and other factors.
Conventional Loans: For conventional loans, the limit is typically 45%, although this can go higher in some cases, especially if you have strong credit and a substantial down payment.
It’s important to note that just because you qualify for a certain loan amount, doesn’t necessarily mean it’s the right amount for you. Qualification is often based on your gross income (before taxes) and a set amount per dependent you support. This can give you a higher loan amount than you may feel comfortable spending.
You’ll want to consider other monthly expenses in addition to your mortgage, such as utilities, insurance, car payments, savings, and even your discretionary spending (like dining out, entertainment, and hobbies). It’s easy to get caught up in the excitement of buying a home, but it’s important to make sure you’re still able to live comfortably after factoring in all of your monthly expenses.
I can help you navigate these numbers, determine a comfortable price range, and ensure that you make a choice that fits your budget and long-term financial goals. Let’s discuss your options and tailor a strategy that works for you.
What is the home buying process?
The home buying process can seem overwhelming, but with the right guidance, it’s a manageable and exciting experience. Here’s an overview of the key steps:
Get Pre-Approved for a Loan
Before you start house hunting, it’s important to know how much you can afford. I recommend getting pre-approved for a mortgage, which means a lender will review your finances and provide a letter stating the loan amount you qualify for. This step helps you set a budget, makes you a more competitive buyer, and shows sellers you’re serious.
Start Your Home Search
Now that you know your budget, we can begin looking at homes that meet your needs and preferences. I’ll work with you to narrow down the locations, styles, and features that matter most to you. We’ll tour homes, whether in-person or virtually, and I’ll help you evaluate their pros and cons.
Make an Offer
Once you’ve found the right home, it’s time to make an offer. I’ll help you determine a competitive price based on comparable properties in the area, current market conditions, and the seller’s situation. We’ll also discuss contingencies (like inspection or financing), and I’ll present the offer to the seller’s agent.
Negotiate and Sign a Contract
Once the seller responds, there may be some negotiation. We’ll work together to reach an agreement on price, terms, and contingencies. Once both parties agree, you’ll sign the purchase contract, and we’ll move on to the next step.
Home Inspection and Appraisal
After your offer is accepted, you’ll typically schedule a home inspection. This is an opportunity to identify any potential issues with the property that could affect your decision. Depending on the results, we may renegotiate with the seller for repairs or credits. Additionally, the lender will order an appraisal to ensure the home’s value meets or exceeds the loan amount.
Finalizing Your Loan
Once the inspection and appraisal are complete, your lender will process your mortgage. You’ll need to provide additional documentation for underwriting. During this time, I’ll keep you informed of the progress and help you prepare for closing.
Closing Day
The final step is closing, where you’ll sign the final paperwork and take ownership of the home! You will receive your keys to your new home once the new deed is successfully recorded with the county Register of Deeds. This may be the same day, or the next business day depending on the time of day of your closing. I’ll be with you every step of the way to ensure everything goes smoothly and that you understand the terms of your loan and the closing costs.
Throughout this process, I’ll be there to answer questions, handle negotiations, and ensure the process stays on track. My goal is to make this as seamless and stress-free as possible while helping you secure the home of your dreams!
In North Carolina, the due diligence process is made up of two key components: the Due Diligence Period and the Due Diligence Fee. Here’s what you need to know:
Due Diligence Period
The due diligence period is an agreed-upon timeframe that allows the buyer to:
During this period, the buyer has the right to cancel the contract for any reason without being in breach of the agreement. If the buyer cancels, they forfeit the due diligence fee but retain their earnest money (if applicable).
Typically, the seller will take the home off the market during this period, although some sellers may allow showings and accept backup offers. The length of the due diligence period is negotiable but usually ranges from 2-4 weeks, depending on the complexity of the transaction and the buyer’s needs.
Due Diligence Fee
The due diligence fee is a non-refundable payment made by the buyer directly to the seller at the time the contract is signed. It serves two main purposes:
Important points to know:
When determining the due diligence fee, I’ll help you consider factors like your overall goals, how much you want the home, and your level of certainty about moving forward. If this is your dream home and you're confident in your decision, a higher due diligence fee may make your offer more competitive. On the other hand, if you’re unsure or anticipate needing flexibility, we might opt for a more conservative approach. Together, we'll find the right balance to protect your interests and make a compelling offer.
In North Carolina, the due diligence fee and earnest money are both payments made by the buyer during the home-buying process, but they serve different purposes and have distinct rules.
Earnest money is a "good faith" deposit that shows the buyer’s seriousness about purchasing the property. Unlike the due diligence fee, it is held in escrow by a third party, usually the closing attorney or a licensed real estate brokerage, rather than going directly to the seller. If the buyer cancels the contract during the due diligence period, the earnest money is typically refundable. However, if the buyer cancels after the due diligence period has ended, the seller may be entitled to keep the deposit depending on the terms of the contract.
If the transaction is completed, the earnest money deposit is applied as a credit toward the buyer’s closing costs. The amount of earnest money is negotiable and is generally larger than the due diligence fee, serving as additional financial assurance for the seller. Buyers should carefully consider this amount as part of their overall financial commitment to the transaction.
As your buyer's agent, I will work with you to develop a due diligence and earnest money strategy tailored to your goals. Together, we can allocate funds strategically between the two based on the current market conditions and how much value you place on a particular home.
Why should I have my own agent if I am buying directly from a builder?
It’s a common misconception that working directly with a builder means you don’t need your own real estate agent. However, having your own agent in this situation can be incredibly valuable. Here’s why:
Ethical Standards
Not all builders use licensed real estate agents in their sales offices. In some cases, the sales staff working directly with buyers may not be bound by the same ethical standards and legal obligations as a licensed agent. Having your own agent ensures that you have someone whose responsibility is to protect your best interests and provide objective guidance throughout the process.
Builders are Focused on Other Priorities
While builders are there to sell homes, they are also managing a variety of other tasks, such as overseeing construction, managing timelines, and dealing with contractors. As a result, they may not have the time or bandwidth to focus on every detail of your purchase. A dedicated real estate agent will have your back, helping you navigate the buying process, ensuring you understand all terms, and advocating for your needs.
Negotiation Expertise
Even when buying a new home, there is room for negotiation, whether it’s on price, upgrades, or incentives. A skilled real estate agent will know how to negotiate on your behalf to ensure you’re getting the best possible deal. Builders may be more willing to offer concessions when they know you’re working with a knowledgeable agent who understands the market.
Unbiased Advice
A real estate agent will offer you unbiased advice. While the builder’s sales staff is motivated to sell you a home, your agent’s job is to make sure the home fits your needs, your budget, and your long-term plans. They will walk you through every step, ensuring you don’t miss important details like warranties, upgrades, or potential issues that may arise during construction.
In short, having your own agent when buying from a builder ensures that you have a dedicated professional in your corner, looking out for your best interests, and helping you navigate the complexities of the new home buying process.
If I buy a home without an agent, does that mean the seller will give me a discount?
It’s a common misconception that if you buy a home without an agent, the seller will automatically offer you a discount. In reality, sellers are primarily focused on maximizing their profit, and they are under no obligation to offer a discount simply because you’re not using an agent.
Here’s why:
Seller's Goal is to Maximize Profit
The seller's goal is to sell their home for the highest price possible, and they are willing to pay a buyer’s agent commission to attract more potential buyers. The commission is often factored into the listing price, so just because you’re not represented by an agent doesn't mean the seller will simply keep that commission. They may choose to keep it as additional profit rather than passing it on to you. In most cases, the price is set based on the market and comparable sales, not on whether a buyer has an agent.
No Obligation to Provide a Discount
Sellers are not legally required to offer a price reduction for an unrepresented buyer. Even though the commission for a buyer’s agent might not be necessary in this case, it doesn’t mean the seller has to lower the price. They may simply choose to keep that portion of the listing price for themselves.
Past Negative Experiences
Some sellers have had negative experiences with unrepresented buyers, such as issues with negotiations or a lack of understanding of the process. Because of this, some sellers may be hesitant to work with a buyer without an agent, preferring the security of working with someone who has professional guidance. In such cases, the seller may not be interested in offering any discounts and may prefer to continue marketing the home to buyers who are represented by agents.
In conclusion, not using an agent doesn’t automatically guarantee a discount. Sellers aren’t obligated to reduce their price just because you're not working with an agent, and many will still factor in the buyer’s agent commission when pricing their home.
If I can find a home online on one of the websites, why would I use an agent?
While you can find homes online through third-party websites, that’s just a small part of the home-buying process. The information on those sites is a limited version of the MLS (Multiple Listing Service) and often misses key updates, such as new listings, price changes, or property status updates. Finding a home is just the start—there’s so much more involved to ensure the entire process goes smoothly.
Can you buy a home without an agent and just hire an attorney to review the contract? Sure, that’s an option. But whether or not you should is a different story. As your agent, my role goes well beyond just helping you find a home. I’m here to advocate for you throughout the entire process—negotiating on your behalf, handling the paperwork, addressing contract issues, and managing any challenges that arise with the home or the deal.
If you’re buying a home to flip, you may have the experience and resources to manage unexpected issues that come up, like repairs or other financial hurdles. Flippers tend to be more detached from the emotional side of the purchase, focusing solely on numbers and profitability.
However, if you’re buying a home for your family, the situation is different. This is a big, personal decision, and unexpected problems with the contract, repairs, or even the neighborhood can affect your life long term. That’s where I come in—I’ll help you navigate these challenges, make sure you’re getting the best deal possible, and offer peace of mind throughout the process.
While you could buy a home without an agent, having me by your side gives you the guidance and support you need to ensure the home you’re buying is a great fit for your family—and that the entire process goes as smoothly as possible.
Does a buyer's agent really do any work?
Absolutely, a buyer’s agent does a lot of work, and it’s not just about helping you find a home. In North Carolina, we are a “buyer beware” state, which means sellers are not required to disclose negative information about a property, except for a few very specific items. While a listing agent must disclose certain material facts they are reasonably aware of, they are not obligated to share everything that could be wrong with the home. This is where I come in—I’m here to protect your interests.
As your buyer's agent, my role is to guide you through the entire home-buying process. I’ll work with you to find the right property, negotiate the best price, and ensure you understand every detail of the contract. But it goes beyond that. I’ll help identify potential issues you might not be aware of, such as problems with the home that aren't always visible during a showing. And I’m also here to manage the human side of things—personality conflicts, miscommunications, and unexpected bumps in the road.
For example, let’s say you’re just a couple of days from closing, and the seller still hasn’t moved out of the house. I’ve seen this happen time and time again, and my job is to help resolve it. I’ll use my knowledge, resources, and connections to work through the issue—whether that’s getting advice from other agents or seeking legal counsel. And, importantly, I should have already anticipated this kind of scenario and recommended contract protections that give you peace of mind in case it happens.
At the end of the day, my job is to protect your investment, ensure you’re making informed decisions, and handle all the details and negotiations that will make your home-buying experience as smooth as possible.
