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Buyer FAQ
Is buying better than renting?
That depends on what you're looking to achieve. If you're looking to pay a landlord more for a place than it is worth and never build any wealth of your own, then keep renting. If you're looking to build wealth and live more affordably, then the answer is; buying is better. One of the arguments for renting that I have heard time and time again is "Well, it's nice because I'm not responsible for the maintenance issues that pop up. I just call my landlord." This may be true in the case of renting, but it is also true in the case of purchasing a condo and some types of properties under an HOA. The only difference is that you aren't flushing your hard-earned money down the drain. If you buy a condo, you are actually building wealth through equity pay-down. The decision is yours to make.
How much will I need for the down-payment and closing costs?
Sometimes nothing!
There are several different types of loans available. With an FHA loan, your down-payment can be as low as 3.5%. Conventional loans start as low as a 3% down-payment. USDA, VA and PHFA loans are other available options in the state of Pennsylvania sometimes with 0% down! Each loan type carries different terms and options.
For a buyer who takes advantage of Seller Assist, the total due at closing can be very minimal. In general, it is good to assume that you will need at least 10% of the sale price however I have actually witnessed closings where the buyer brought absolutely nothing to the closing and in the case of VA Loans, I've seen buyers get a check at closing and walk away with keys to their new house AND money for their pocket. Keep in mind that this is possible but unlikely.
If you would like to know more about how these loans work we can get you in contact with a loan officer.
If you would like detailed cost estimate from one of our buyer specialists, please feel free to contact us with the request.
What is "Seller Assist"?
Seller Assistance is simply when the seller of the home pays for a portion, or all of your closing costs, transfer taxes and other closing fees. Seller Assist isn't just "included" with the purchase. It must be negotiated. One of the benefits of hiring an experienced real estate agent is getting proven negotiating skills to help get you the best deal possible.
When should I get pre-approved for a mortgage?
As soon as you are serious about buying and before seeing a house in person. A pre-approval letter allows you to know the ceiling of your purchasing power and lets sellers know that you are a serious, well-qualified buyer who is ready to buy. Should a seller be in a multiple-offer situation, you can be sure that they are likely to throw out any offer that did not include a pre-approval letter or a proof of funds. I even recommend that potential buyers connect with a lender to get pre-approved sometimes over 6 months before taking their first home tour. It is an integral part of the planning process. If you are unable to get approved for the amount you would like, it will at least give you a starting point and lay out the steps to achieving your purchase goals.
What type of home loan is best?
With several different home loan options available, the best loan is the one that best fits your needs. If you're looking for the lowest down-payment, then PHFA or FHA may be the way to go. If you would like to avoid PMI and can afford a larger down-payment, then a conventional loan will work well. VA is a great option for veterans and USDA offers up to 100% financing in areas that are approved for USDA financing. Talk to a professional buyer-agent for a great recommendation. You can also find lender contact information on our Vendors page.
How much can I afford to pay for a home?
A good question. Generally I would advise a buyer client to first consider the monthly payment that they would be most comfortable with. Once we know what this payment would be, then we can evaluate the amount of down-payment that the buyer would be comfortable with and come up with a sale price ceiling. At this point we then know the highest price the buyer would be comfortable with. It is also okay to first get pre-approved and your lender can tell you the highest amount of loan they will be able to provide as well as what the monthly payment would be for that loan amount. If you would like help determining this number, contact us to schedule a consultation with a professional buyer-agent.
When should I start looking for a home?
Usually it is best to have your pre-approval in hand before touring properties, however there are plenty of online home search sites that many buyers like to use sometimes for years prior to actually setting foot in a home. Try out Pittsburgh's best home search site if you would like to start your property search online today.
What type of deed should I be looking to get?
In Pennsylvania, most buyers are looking for a General Warranty Deed. This type of deed states that the current owner can attest to the fact that the property is being turned over to the buyer 100% free and clear of all liens and such as far back as to before William Penn set foot on this land. Once a property is transferred as an Estate or sold through Sheriff Sale or Foreclosed upon, it becomes impossible for the seller to offer a General Warranty Deed. In these cases a Special Warranty Deed is what would be offered. If you have more concerns about deed types, it is best to consult a real estate attorney. You may even find a good one on our vendors page.
How do I know I'm getting the property "free and clear" of liens and other encumbrances?
The best way to know for sure is to have a title search completed by the settlement company who will be performing the majority of your closing, deed, and title tasks. If you will be using financing to purchase the property, then Title Insurance will be mandatory (as per your lender's mortgage requirements). If you are purchasing with cash, you will be asked if you would like to obtain a Title Insurance Policy. We always recommend that you always obtain a policy. Find a great title company on our Pittsburgh Real Estate Vendors Page. An easy way to go about this is by hiring a professional real estate agent to help you with your purchase.
What is title insurance?
Title Insurance protects you (the home buyer) from any missed or overlooked issues with the title. So for instance, if the title company forgets to mail a payoff check to the previous owners mortgage company and you are in the middle of selling the property 15 years later before you find this out, you would make a Title Insurance claim and the insurer would pay out or correct the issue.
What is PMI?
PMI stands for Private Mortgage Insurance. PMI protects the lender from you defaulting but you (as the buyer) have to pay for it. This is something that is required by lenders for any loan less than 80% LTV (Loan To Value). So if you're putting less than 20% down, you will be paying for PMI up front and/or within the monthly loan payment.
What is P&I?
P&I stands for Principle and Interest. This is what your basic mortgage payment involves. If you are putting 20% or more down, then you will only be invoiced for P&I unless you decide to set up an escrow account to include your Home Owner's Insurance and Taxes within the payment. Most mortgage lenders will require an escrow to be set up for owner-occupied properties.
What is an escrow account and how does it work?
An escrow account is set up usually through the mortgage company. At the closing, the buyer typically pays Home Owner's Insurance and Taxes in advance and this money is placed in the escrow account. From this point on, all mortgage payments will include monthly insurance and tax costs and will replenish the escrow account on a regular basis. The lender then pays your home owner's insurance and taxes from this account so they can assure that they are paid on time every year and that the property will not be pulled from them in a tax sale.
What's the difference between any agent out there and a Buyer-Agent?
Well, most agents out there are "jack-of-all-trade" agents who are responsible for doing everything from listing, selling and showing to administrative duties, ad design and even photography. With in our team, we call our Buyer-Agents by a different name... they are Buyer Specialists. This means that they spend at least 80% of their time working for the benefit of our buyer clients. Whereas the average agent is distracted by 10 to 15 other duties on any given day, our Buyer Specialists only have 1 duty; to find our buyer clients the home that meets their needs for the best possible price and terms as well as ensuring a smooth transaction and advising in the buyer's best interests. Our buyer specialists have 10 times more experience working with buyers than the average agent. If you would like to schedule an appointment for a free initial consultation with a buyer specialist please visit The Dustin Nulf Team Contact page or visit the About us page and feel free to connect with the agent that best fits your personality.
Why should I work with an agent? Won't I save money if I do it alone or deal with the Listing Agent directly?
When I first got in to real estate sales, a good friend of mine bought a house. I was disappointed to find out that he purchased it alone and from a FSBO (For Sale By Owner) without consulting me at all. As a curious person, I looked up the sale on the Allegheny County Real Estate Website to find out what he paid for the property. I then pulled up comparable properties on the local MLS and came to the conclusion that he ended up overpaying for the property by at least $25,000. The commission that he would've paid me for my advice and help would have been only $4350 and it would have been wrapped into the sale price (therefore not paid out of his pocket, but out of the seller's proceeds). My friend could have saved $20,650 by contracting a buyer's agent for advice and negotiating skills.
Keep in mind that unless you sign a Buyer Agency Contract with the listing agent, the listing agent represents the seller only. Not only that but the more money you pay for the property, the more commission the listing agent makes. Sounds like it may be a good idea to talk with a Buyer Specialist, huh?
That depends on what you're looking to achieve. If you're looking to pay a landlord more for a place than it is worth and never build any wealth of your own, then keep renting. If you're looking to build wealth and live more affordably, then the answer is; buying is better. One of the arguments for renting that I have heard time and time again is "Well, it's nice because I'm not responsible for the maintenance issues that pop up. I just call my landlord." This may be true in the case of renting, but it is also true in the case of purchasing a condo and some types of properties under an HOA. The only difference is that you aren't flushing your hard-earned money down the drain. If you buy a condo, you are actually building wealth through equity pay-down. The decision is yours to make.
How much will I need for the down-payment and closing costs?
Sometimes nothing!
There are several different types of loans available. With an FHA loan, your down-payment can be as low as 3.5%. Conventional loans start as low as a 3% down-payment. USDA, VA and PHFA loans are other available options in the state of Pennsylvania sometimes with 0% down! Each loan type carries different terms and options.
For a buyer who takes advantage of Seller Assist, the total due at closing can be very minimal. In general, it is good to assume that you will need at least 10% of the sale price however I have actually witnessed closings where the buyer brought absolutely nothing to the closing and in the case of VA Loans, I've seen buyers get a check at closing and walk away with keys to their new house AND money for their pocket. Keep in mind that this is possible but unlikely.
If you would like to know more about how these loans work we can get you in contact with a loan officer.
If you would like detailed cost estimate from one of our buyer specialists, please feel free to contact us with the request.
What is "Seller Assist"?
Seller Assistance is simply when the seller of the home pays for a portion, or all of your closing costs, transfer taxes and other closing fees. Seller Assist isn't just "included" with the purchase. It must be negotiated. One of the benefits of hiring an experienced real estate agent is getting proven negotiating skills to help get you the best deal possible.
When should I get pre-approved for a mortgage?
As soon as you are serious about buying and before seeing a house in person. A pre-approval letter allows you to know the ceiling of your purchasing power and lets sellers know that you are a serious, well-qualified buyer who is ready to buy. Should a seller be in a multiple-offer situation, you can be sure that they are likely to throw out any offer that did not include a pre-approval letter or a proof of funds. I even recommend that potential buyers connect with a lender to get pre-approved sometimes over 6 months before taking their first home tour. It is an integral part of the planning process. If you are unable to get approved for the amount you would like, it will at least give you a starting point and lay out the steps to achieving your purchase goals.
What type of home loan is best?
With several different home loan options available, the best loan is the one that best fits your needs. If you're looking for the lowest down-payment, then PHFA or FHA may be the way to go. If you would like to avoid PMI and can afford a larger down-payment, then a conventional loan will work well. VA is a great option for veterans and USDA offers up to 100% financing in areas that are approved for USDA financing. Talk to a professional buyer-agent for a great recommendation. You can also find lender contact information on our Vendors page.
How much can I afford to pay for a home?
A good question. Generally I would advise a buyer client to first consider the monthly payment that they would be most comfortable with. Once we know what this payment would be, then we can evaluate the amount of down-payment that the buyer would be comfortable with and come up with a sale price ceiling. At this point we then know the highest price the buyer would be comfortable with. It is also okay to first get pre-approved and your lender can tell you the highest amount of loan they will be able to provide as well as what the monthly payment would be for that loan amount. If you would like help determining this number, contact us to schedule a consultation with a professional buyer-agent.
When should I start looking for a home?
Usually it is best to have your pre-approval in hand before touring properties, however there are plenty of online home search sites that many buyers like to use sometimes for years prior to actually setting foot in a home. Try out Pittsburgh's best home search site if you would like to start your property search online today.
What type of deed should I be looking to get?
In Pennsylvania, most buyers are looking for a General Warranty Deed. This type of deed states that the current owner can attest to the fact that the property is being turned over to the buyer 100% free and clear of all liens and such as far back as to before William Penn set foot on this land. Once a property is transferred as an Estate or sold through Sheriff Sale or Foreclosed upon, it becomes impossible for the seller to offer a General Warranty Deed. In these cases a Special Warranty Deed is what would be offered. If you have more concerns about deed types, it is best to consult a real estate attorney. You may even find a good one on our vendors page.
How do I know I'm getting the property "free and clear" of liens and other encumbrances?
The best way to know for sure is to have a title search completed by the settlement company who will be performing the majority of your closing, deed, and title tasks. If you will be using financing to purchase the property, then Title Insurance will be mandatory (as per your lender's mortgage requirements). If you are purchasing with cash, you will be asked if you would like to obtain a Title Insurance Policy. We always recommend that you always obtain a policy. Find a great title company on our Pittsburgh Real Estate Vendors Page. An easy way to go about this is by hiring a professional real estate agent to help you with your purchase.
What is title insurance?
Title Insurance protects you (the home buyer) from any missed or overlooked issues with the title. So for instance, if the title company forgets to mail a payoff check to the previous owners mortgage company and you are in the middle of selling the property 15 years later before you find this out, you would make a Title Insurance claim and the insurer would pay out or correct the issue.
What is PMI?
PMI stands for Private Mortgage Insurance. PMI protects the lender from you defaulting but you (as the buyer) have to pay for it. This is something that is required by lenders for any loan less than 80% LTV (Loan To Value). So if you're putting less than 20% down, you will be paying for PMI up front and/or within the monthly loan payment.
What is P&I?
P&I stands for Principle and Interest. This is what your basic mortgage payment involves. If you are putting 20% or more down, then you will only be invoiced for P&I unless you decide to set up an escrow account to include your Home Owner's Insurance and Taxes within the payment. Most mortgage lenders will require an escrow to be set up for owner-occupied properties.
What is an escrow account and how does it work?
An escrow account is set up usually through the mortgage company. At the closing, the buyer typically pays Home Owner's Insurance and Taxes in advance and this money is placed in the escrow account. From this point on, all mortgage payments will include monthly insurance and tax costs and will replenish the escrow account on a regular basis. The lender then pays your home owner's insurance and taxes from this account so they can assure that they are paid on time every year and that the property will not be pulled from them in a tax sale.
What's the difference between any agent out there and a Buyer-Agent?
Well, most agents out there are "jack-of-all-trade" agents who are responsible for doing everything from listing, selling and showing to administrative duties, ad design and even photography. With in our team, we call our Buyer-Agents by a different name... they are Buyer Specialists. This means that they spend at least 80% of their time working for the benefit of our buyer clients. Whereas the average agent is distracted by 10 to 15 other duties on any given day, our Buyer Specialists only have 1 duty; to find our buyer clients the home that meets their needs for the best possible price and terms as well as ensuring a smooth transaction and advising in the buyer's best interests. Our buyer specialists have 10 times more experience working with buyers than the average agent. If you would like to schedule an appointment for a free initial consultation with a buyer specialist please visit The Dustin Nulf Team Contact page or visit the About us page and feel free to connect with the agent that best fits your personality.
Why should I work with an agent? Won't I save money if I do it alone or deal with the Listing Agent directly?
When I first got in to real estate sales, a good friend of mine bought a house. I was disappointed to find out that he purchased it alone and from a FSBO (For Sale By Owner) without consulting me at all. As a curious person, I looked up the sale on the Allegheny County Real Estate Website to find out what he paid for the property. I then pulled up comparable properties on the local MLS and came to the conclusion that he ended up overpaying for the property by at least $25,000. The commission that he would've paid me for my advice and help would have been only $4350 and it would have been wrapped into the sale price (therefore not paid out of his pocket, but out of the seller's proceeds). My friend could have saved $20,650 by contracting a buyer's agent for advice and negotiating skills.
Keep in mind that unless you sign a Buyer Agency Contract with the listing agent, the listing agent represents the seller only. Not only that but the more money you pay for the property, the more commission the listing agent makes. Sounds like it may be a good idea to talk with a Buyer Specialist, huh?