Frequently Asked Questions

Answering Your Baltimore, MD Home Buying Questions

Buying a Baltimore, MD home is both thrilling and a bit unnerving, especially if you're a first-time home buyer. Both experienced home buyers and first-time buyers alike will benefit from the frequently asked questions below. Before you begin your Baltimore, MD home search, it is recommended that you prepare yourself for the journey by educating yourself. This will ensure you are a knowledgeable home buyer prepared to make a confident home buying decision.

1. I've never purchased a home before.  Where should I begin?

Answer: Actually, you've already started the process. Fact-finding and reading articles is a great way to become a smart consumer. The highest priorities to focus on before you begin searching for specific areas, neighborhoods, or homes would be to:

• Familiarize yourself with your personal finances.
• Learn about the Baltimore, MD real estate market.
• Carefully review your budget and begin to eliminate as much debt as possible.
• Have a down payment and earnest money ready when the time comes to act and make your offer.

Your next step is to contact us. As your home buying specialists, we'll protect your interest and manage the details of the real estate transaction on your behalf to your complete satisfaction.  For more experienced buyers, a little brush up on the real estate process wouldn't be a bad idea. Of course, you'll need a really sharp Baltimore, MD real estate team to protect your interests too!

2. With all the bad news about mortgage products and home foreclosures, how do I avoid making a big mistake when deciding which type of loan to select?

Answer: Once we meet and review your finances along with your home buying needs, you should select a lending consultant. We can recommend several trusted lending professionals or you can choose your own. Having upmost confidence in your lender is important. Be sure you feel completely at ease with them.  They should speak to you in easy to understand terms.  Ask lots of questions and never sign any document until you know what you are signing and feel completely at ease signing it. More and more lending professionals are recommending fixed interest rate loans and interest rates are still very attractive. Of course, the type of loan best for you depends on several factors. Here are just a few:

• How much money do you have for a down payment?
• How long do you plan to live in the home?
• Do you qualify for a FHA or VA loan?

Because more homes are on the market here in Baltimore, MD, your choices are plentiful and the time is right for you to buy!

3. What can I do to make my offer look better then another buyer’s offer?

Answer: it takes more than good luck to get the right home at the right price. One advantage you can have on your side is a conditional loan pre-approval. When you are pre-approved your offer is more attractive because the seller doesn’t have to wonder if you can afford to buy. The seller will know in advance that your offer is as good as money in the bank.

Pre-approval versus pre-qualification: A pre-approval is a conditional loan approval from a lender based on your application. Pre-approval differs from pre-qualification, which is a verbal exchange with a lender about how much you can probably afford. Pre-qualification does not obligate the bank to make the loan, whereas a pre-approval is a conditional loan commitment. Final approval is made with both your finances and the property pass review.

Close the deal faster: Lining up your mortgage loan before you start house hunting could make buying your new home quicker and easier. A pre-approval can speed closing because most of the paperwork is already in place for the loan. You have already started to learn about the financing process, and any problems will have been resolved.

4. What is earnest money?

Answer: Earnest money is a cash deposit buyers make when they sign a contract to buy a house. It signifies the intention of the buyer to complete the purchase. At closing, the earnest money becomes part of the down payment if the buyer defaults without a good reason, as spelled out in the contract, the earnest money may become payment for damages suffered by sellers and their agents.

5. What is a contingency?

Answer: A contingency is a condition on the sale put into the contract by either the buyer or seller to protect against specific eventualities. Examples of common contingencies are: a requirement that the buyer obtain financing or sell their current home; the buyer has a home inspection done; or the seller must repair certain items before settlement. Contingencies can be removed by an addendum to the contract, or they may expire if a time limit is specified in the contract.

6. Which settlement expenses can buyers deduct on their taxes?

Answer: Some of the biggest costs at settlement are tax deductible in the year the home was bought. The loan fee or points, even if paid by the seller, as well as the pro-rated mortgage interest and property taxes, are tax deductions. Costs that are not deductible include attorney and recording fees, transfer taxes and termite inspection. The homeowner’s property insurance is a personal expense, so it’s not tax deductible. Consult your attorney or accountant for detailed information on which expenses are deductible.

7. What is a Home Warranty Plan?

A home warranty plan is a residential service contract that helps protect the homeowner in the event of a mechanical breakdown of a covered component.

• 79% of buyers want a warranted home
• 74% of sellers consider a warranty very important

Why is a home warranty plan important to the seller?

• The seller is protected while their home is on the market.
• People prefer to buy homes that are protected by a warranty.
• There are no caps or age limitations on any of the items covered in the policy.
• Vacant homes can be covered provided that all utilities remain on and the home stays in show condition.
• The chances of having to reimburse the buyer are reduced and consequently, sale proceeds are protected.
• Reduced litigation.

What items are covered?

Standard items for the seller include kitchen, laundry and other appliances, plumbing systems and pipes, water heaters, water softeners, electrical systems, garage door openers, central vacuum systems, ceiling fans and door bell chimes. Optional items for the seller include central air/cooling systems and central heating systems.

Why is a home warranty plan important to the buyer?

• The buyer is covered for one full year from the time of settlement, providing that payment is received within seven days of settlement.
• The buyer has peace of mind in knowing they are protected.
• The warranty may be renewed for years to come.
• Unplanned expenditures may be avoided.
• There are no caps or age limitations on any of the items covered in the policy.
• Qualified contractors are available 24 hours a day through a claim service hotline.

What items are covered?

Standard items for the buyer include, with certain conditions, kitchen, laundry and other appliances, primary central air/cooling systems, primary central heating systems, plumbing systems and pipes, water heaters, water softeners, electrical systems, garage door openers, central vacuum systems, ceiling fans and door bell chimes.

Optional items for the buyer include well pump systems, swimming pools, heaters for swimming pools/spas, spas and jetted bathtubs.

Let's Get Started!

Are you ready to schedule your home buying consultation?  If so, contact us today and together we will review your needs and your budget to help you find the right Baltimore, MD home for you!