Real Estate FAQ

As you might imagine, we field quite a few real estate questions every day. People are always curious, and it’s a realtor’s job to guide seller, buyers and investors through this often-
complex world. Some questions are more popular than others as you might imagine. Here are some answers to the questions that come up most often.

Q. What the first step of the home buying process? Getting a mortgage approval might be your first step. It gets the ball rolling with the mortgage company and also gives
you an indication as to your budget and what price point you must consider. You would also know if you have saved enough for your down payment and what your monthly mortgage
payment would be. There are also costs associated with getting a loan, make sure you are not surprise by any hidden charges for your mortgages.
Experience realtors usually conducta pre-approval interview prior to showing a client a home. You must also be aware that high-end clients usually required proof of
qualification (pre-screening of buyers) before viewing their property.

Q. How long does it take to buy and closed property? Depending on the market condition, from fining a home on the internet to finishing closing it can take 8-26 weeks.
Title properties close faster than Transported or leased properties. Market conditions are a major factor in how fast a property is sold. In a hot market, with a lot of sales activity,
closing in on a property might take a little longer than normal because several parties may get involved in the transaction leading to multiple offers on the same property.

Q. What is a seller’s market? A sellers’ market is where the demand for properties is higher than the available inventory. This cause prices to go up. There are many reasons
why a market could get hot such as an influx of Jobs in the area, causing an inflow of new residence. More jobs in an area mean more demand for rental spaces as well or
commercial building and parking spaces.

Q. What is a buyer’s market? A buyer’s market is the opposite, usually characterized by declining home prices and reduced demand. Some factors that may affect long-term
and short-term buyer demand would be like: Economic disruption - a big employer shuts down operations, (Guysuco) laying off their workforce etc. Also as interest rates trends
higher - the amount of money the people can borrow goes down reducing the number of people that can qualify for the market.

Q. What is a stratified market? A stratified market usually occurs when the supply and demand characteristics differ by price point, in the same area. This means that properties
above a certain price point is selling faster than property below a certain price point. For example you might have foreign investors looking to park their money in real estate but they
won’tdo it in low price property – instead they would look to buy beach front or water front properties – as such the property with higher prices are selling faster than the
low value property.

Q. How much do I have to pay an agent to help me buy a house? At Realtor Hub, you do not pay a commission to us for using the services; however independent agents or
rmay charge a fee starting at 1% of the selling price. You must take into consideration that most deals may include the use of two or more realtors, one representing the seller and one
representing the buyer. Fees vary depending on many factors, for example the amount and level of marketing. Realtors who represent buyers (a.k.a. buyer’s agent) are commonly
compensated by the listing broker for bringing buyers to the table. When the property is sold, the listing broker splits the listing fee with the buyer’s agent. Thus, buyers don’t pay their agents.

Q. What kind of credit score do I need to buy a home? In Guyana there is no a FICO score, however most lenders are now link to a credit reporting agency known as
Credit Bureau Guyanawhere they can view consumers credit history. You too can request a copy at  Consumer Credit Report (everydata.com).

Q. How much do I need for a down payment? The average for down payments is 10% but some institution also offers up to zero percentage down.
Most first time home owners average between 3-7% down.

Q. Should I sell my current property before buying a new one? If the built-up equity in your current property will be applied to the down payment on the new property,
naturally the former will need to be sold first. Some home owners may choose to become investors by turning their current property into an investment property and renting it out.
In this case, the current property will not need to be sold. A loan advisor will still need to evaluate your risk profile and credit history to determine whether making a loan
on a new property is feasible while retaining title to the old property.

Q. How many properties should I view before buying one? That’s totally up to you! For sure, buying properties today is much easier than ever before. The ability to search for homes
online and see pictures, even before setting a foot outside the comfort of your home, has completely changed the investment game. However keep in mind that while convenience may be
at an all-time high, nothing beats visiting a property  to see how it looks and ‘feels’ in person.

Q. What is earnest money? Unlike in some countries where a small deposit, typically 1% to 2% of the purchase price accompany the purchase offer. In Guyana it is usually
50% unless the purchase price unless the deal is being finance by the bank. This 1% to 2% is known as earnest money which demonstrates good faith by the buyer.
It also act as conditional offerand let the seller takes the property off the market and keep it in reserve for the buyer until all the other buying conditions are met.
It is important to mention here that if the deal falls through, then the money is returned to the buyer. If however the terms of a deal are agreed upon by both parties,
but then the buyer backs out, the earnest money may not bereturned to the buyer. Your realtor may be able to advise you on ways to protect your earnest money deposit
and the ways to protect it – such as offer contingencies.

Q. How long can the seller take to respond to my offer? Written offers should stipulate the timeframe in which the seller should respond,
giving them twenty-four hours should be sufficient.

Q. What if my offer is rejected? Sellers can choose to flat-out accept or reject an offer or more commonly, sellers will initiate a counteroffer. A deal isn’t dead until it’s dead.
So, if a counteroffer is proffered by the seller, you’re still in the game. You and your agent just need to review it determine whether the counteroffer is acceptable. If so, then approving
it and closes the deal immediately. Offers and counteroffers can go back-and-forth many times; this is not unusual and negotiations are a part of what’s Realtors do.

Q. Should I order a property inspection? Absolutely, especially if you are financing the deal. Even with New Home Construction, we highly recommend it because they can reveal
defects in the property that are not easily detected. Property inspections bring peace of mind with these large lifetime investments.

Q. Do I need to do a final walk-through? While it’s not required, but it’s a great idea! Final walk-throughs give buyers a chance to make sure nothing had changed since their
first visit. If repairs were requested, as part of the offer, a follow-up visit ensures that everything is squared-away, as expected, per the terms of the contract.