1st Time Homebuyer Guides Mortgage Uncategorized

No Income Verification Mortgage

Guidelines & Considerations

Buying a house can feel tough if you don’t have proof of income. But did you know there’s something called a no income verification mortgage? 

If you’re looking to get a mortgage without showing proof of income, it might be an uphill battle, but it’s not impossible.

This article will guide you through what it is and how it could be the solution for your home-buying journey.

Keep reading to learn more about the ins and outs of no income verification mortgages to see if they’re right for you.

Key Takeaways

  • No income verification mortgages help people buy homes without showing traditional proof of income, making it easier for the self-employed or those with variable incomes to qualify.
  • These types of loans often require a higher credit score, substantial down payment, and evidence of financial health but may carry higher interest rates and fees compared to standard mortgages.
  • Benefits include not needing to provide income documentation, flexibility in debt-to-income ratios, and the ability for individuals with lower or irregular incomes to secure a loan.
  • Risks involve potential higher borrowing costs due to increased interest rates and fees, a significant upfront down payment requirement, and strict credit score standards that applicants must meet.
  • Tailored mainly for self-employed individuals, real estate investors, retirees relying on investments or savings, and those with non-traditional sources of income who can manage mortgage payments responsibly despite their unique financial situations.

Can you get a loan without any income?

Lenders often require proof of income to process a mortgage application. Yet, it is possible to get a loan through no income verification mortgages.

These special loans cater to those who cannot provide traditional income documents but still need financing for their home purchase.

Prospective buyers should understand that while these loans offer an alternative path to homeownership, they come with unique requirements and might carry higher interest rates than conventional mortgages.

This option can be particularly appealing if you have substantial savings, other significant assets, or maybe you’re self-employed with variable income streams.

What is a no income verification mortgage?

A no income verification mortgage allows you to secure a loan without needing to prove your income through traditional means like tax returns or pay stubs. Lenders instead look at other factors such as your credit score, assets, and the overall health of your finances.

This type of mortgage suits those who may not have a steady income but possess substantial savings or investments. It breaks down barriers for freelancers, entrepreneurs, and others with irregular earnings patterns, making homeownership more accessible.

To apply for this kind of mortgage, you prepare differently than you would for traditional mortgages. You focus on building a strong financial profile that convinces lenders you can manage the loan responsibly.

Showing you have enough in savings or significant assets reassures lenders that even without regular income proof, you remain a good candidate for borrowing. 

This path offers an alternative route to buying a home for many who thought their chances were slim due to their unique financial situations.

No income verification mortgage requirements

Meeting the credit score, down payment, and strong financial situation is essential for a no income verification mortgage.

Credit score

Your credit score plays a crucial role in securing a no income verification mortgage. Lenders use this number to measure your reliability in paying back loans. A higher credit score increases your chances of approval and might lead to better interest rates.

Aim for a credit score above the lender’s minimum requirement to improve your loan terms.

A strong credit score opens more doors in the world of home financing.

Down payment

You must make a substantial down payment when securing a no income verification mortgage. Lenders typically require a larger upfront payment, usually around 20–30% of the home’s purchase price.

This could be a significant hurdle for some buyers, as it requires more money upfront compared to traditional mortgages.

Strong financial situation

To qualify for a no income verification mortgage, you will need to demonstrate a strong financial situation. This includes having a solid credit score, being able to make a substantial down payment, and proving your ability to afford the monthly payments without traditional income documentation.

Lenders will look for evidence of your overall financial stability when considering you for this type of mortgage.

If you meet the requirements and are confident in your financial standing, you may be eligible for a no income verification mortgage that could help pave the way toward owning your dream home.

Benefits of a no income verification mortgage

A no income verification mortgage streamlines the loan process by not requiring income documentation, making it ideal for those earning less. This type of mortgage also offers flexibility with debt-to-income ratios, allowing you to secure a loan without stringent income requirements.

No income documentation

When securing a no income verification mortgage, you won’t need to provide proof of your income through documentation. This can be an advantage for self-employed individuals or those with non-traditional income sources.

This means you can still qualify for a mortgage without the hassle of gathering and submitting extensive financial documents.

You can still secure a loan while earning less income

If you earn less income, you can still secure a loan with a no income verification mortgage. This type of mortgage does not require you to provide traditional income documentation, making it an option for those with varying or lower incomes.

Lenders look at your overall financial situation rather than just your income, allowing more flexibility in qualifying for a home loan.

Debt-to-income ratio leniency

Lenders may be more lenient when considering your debt-to-income ratio with a no income verification mortgage. This means they could be open to approving your loan even if your monthly debt payments are relatively high compared to your income.

By being flexible in this area, lenders aim to provide opportunities for homebuyers who might not meet the traditional income verification requirements. This can help you qualify for a mortgage and achieve your dream of homeownership, despite any existing debts or financial obligations you have.

Risks of no income verification mortgage

Higher borrowing costs may result from a no income verification mortgage, with potential high down payment requirements and credit score standards. These factors could affect your overall financial situation when considering this mortgage option.

Higher borrowing costs

Higher borrowing costs may be involved with a no income verification mortgage, resulting in increased interest rates and fees. This can mean paying more over the life of the loan compared to traditional mortgages. Understanding these potential costs is crucial for your financial planning.

High down payment

A high down payment is required for a no income verification mortgage. Lenders typically ask for a substantial upfront payment — often higher than what’s needed for traditional mortgages. This could mean committing a larger portion of your savings to secure the loan, so it’s important to be prepared financially before pursuing this option.

When considering a no income verification mortgage, the high down payment requirement may significantly impact your ability to purchase a home.

Credit score requirements

Credit score requirements play a significant role in securing a no income verification mortgage. Lenders generally look for a credit score of 620 or higher, but some may require scores of 700 or more.

A solid credit history and strong financial habits can enhance your chances of approval. It’s crucial to maintain a good credit score to meet the requirements necessary for this mortgage option.

Who is a no income verification mortgage for?

A no income verification mortgage is designed for individuals who have difficulty providing traditional income documentation but have other financial assets or resources that can support their ability to repay a loan.

This type of mortgage may be suitable for self-employed individuals, real estate investors with multiple properties, retirees living off investments and savings, and those with irregular or commission-based incomes.

If you fall into one of these categories and are confident in your ability to manage a mortgage responsibly, a no income verification mortgage might be worth considering.

Is a no income verification mortgage right for me?

A no income verification mortgage might be suitable if you are self-employed, have a fluctuating income, or rely on investments rather than a traditional salary. It can also work for individuals who have limited documentation of their income due to various reasons such as being new in the workforce or experiencing recent changes in employment.

This type of mortgage is especially beneficial for those looking to avoid the hassle of extensive paperwork and who prioritize privacy regarding their financial information.

If you’re thinking about getting a no income verification mortgage, you’ve got to talk to a mortgage expert who can help you understand your options. When you’re ready to sit down with a lender, schedule a free consultation. You may qualify for up to $2,198* on a home purchase!


1. What is a no-income verification mortgage?

A no-income verification mortgage is a loan where the lender does not require proof of your income to approve the mortgage.

2. Who can apply for a no-income verification mortgage?

Self-employed individuals, freelancers, and those with irregular incomes often apply for no-income verification mortgages.

3. What do I need to qualify for this type of mortgage?

To qualify, you typically need a good credit score, a larger down payment than usual, and possibly higher interest rates.

4. Are there risks with a no-income verification mortgage?

Yes, there are risks such as higher interest rates and stricter terms that can make it more challenging financially.

5. Can I refinance my home with a no-income verification mortgage?

Yes, you can refinance your home with this type of mortgage under certain conditions and requirements set by the lender.

Book an appointment with a qualified mortgage lender today to accelerate your path to homeownership. You may qualify for up to $2,198* on a home purchase.


The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.

1st Time Homebuyer Guides Real Estate Uncategorized

What is a Purchase and Sale Agreement? Know the Basics

Buying a home can feel overwhelming. I’ve done it twice now so I can consider myself an authority! In all seriousness, those of us who have purchased a home before know how the process can just feel like a lot!

One crucial step in your journey to homeownership is understanding the purchase and sale agreement. This article breaks down what this agreement is and why it’s essential to know about.

Ready to move closer to living in the home of your dreams? Let’s jump right in.

Key Takeaways

  • A purchase and sale agreement is a detailed contract that outlines all aspects of a real estate transaction, including price, closing date, and what happens if someone backs out.
  • This agreement is crucial because it protects both the buyer’s and seller’s interests by making sure everyone agrees on important details before completing the sale.
  • Contingencies within the agreement offer flexibility and safety for buyers. For example, you can cancel the deal if you don’t get a mortgage in time or if an inspection reveals serious issues with the property.
  • The document also includes information about earnest money — a deposit showing you’re serious about buying — plus conditions regarding the title of the property to ensure it’s legally clear for purchase.
  • Before signing a purchase and sale agreement, getting help from professionals like real estate agents or attorneys ensures that all critical elements are properly addressed.

What is a purchase and sale agreement?

A purchase and sale agreement is a legal contract that details the terms of a real estate transaction. It spells out what you and the seller agree to regarding the home’s price, closing date, and other critical aspects.

This document ensures everyone understands their rights and responsibilities before finalizing the deal.

Parties sign this agreement after they negotiate prices and conditions, making it crucial in transferring property ownership. It lists conditions both buyer and seller must meet for the sale to go through.

Failure to comply can lead to canceling the deal or seeking damages, ensuring protection for both sides during the process.

Why is a purchase and sale agreement important?

A purchase and sale agreement serves as a legal roadmap for the entire buying process, ensuring both the buyer’s and seller’s interests are protected. It outlines all the critical details, such as price, closing date, and any contingencies that need to be met before the deal can close.

This clarity helps prevent misunderstandings or disputes, making it essential for a smooth transition of ownership. Without this agreement in place, you risk facing unexpected issues that could derail your dream of homeownership.

What’s the difference between a purchase and sale agreement vs. a purchase agreement?

Understanding the difference between a purchase and sale agreement and a purchase agreement is crucial for prospective homebuyers. 

A purchase and sale agreement is more detailed, covering every aspect of the transaction from start to finish. This document includes specifics like closing dates, inspection rights, and what happens if either party decides to back out of the deal. It serves as a binding contract once both buyer and seller agree to its terms.

On the other hand, a purchase agreement might be simpler, focusing mainly on agreeing upon the price of the property and any major conditions that must be met before finalizing the sale.

While it still represents an important step in buying or selling property, it lacks some of the comprehensive details found in a purchase and sale agreement. 

Elements of a purchase and sale agreement

The purchase and sale agreement includes essential components such as the purchase price, closing date, earnest money, contingencies, title condition, closing costs, and inclusions and exclusions. These elements form the backbone of the agreement that outlines the terms for your property transaction.

Purchase price

The purchase price is the amount you agree to pay for the property. It’s crucial to ensure that it accurately reflects the value of the home. The purchase price in a purchase and sale agreement should be clear and specific, including any details about how it may be adjusted if certain conditions are met, like repairs or appraisals.

Ensuring that the purchase price section of your agreement is precise and well-defined will help avoid any misunderstandings later on. This step is important because it will set expectations with both you as the buyer and the seller from day one!

Closing date

The closing date is when the property changes hands. Both parties need to honor this date, as it’s crucial for finalizing the sale. Keep in mind that negotiations can be made regarding the closing date, so consider your timeline and availability during this period before committing.

Earnest money

After finalizing the closing date, you’ll need to provide earnest money. This is a deposit that shows your commitment to purchasing the property. Typically, it’s submitted when the purchase and sale agreement is signed and held in an escrow account until the sale is completed.

The amount varies but is usually around 1–3% of the purchase price.

Not only does earnest money demonstrate your intention as a serious buyer, it also protects the seller if you were to back out of the deal without a valid reason. Moreover, if all goes well with the purchase, this deposit can often be used towards your down payment or closing costs at settlement.


A purchase and sale agreement can include contingencies that protect you as a homebuyer. These are conditions that must be met for the sale to go through, ensuring your interests are safeguarded. 

Contingencies can cover various aspects of the purchase, such as:

  1. A financing contingency allows you to back out of the agreement if you’re unable to secure a mortgage within a specified period.
  1. An inspection contingency gives you the right to have a professional inspection and request repairs or renegotiate the price if issues are found.
  1. An appraisal contingency ensures that the property is valued at an amount high enough for the mortgage lender to provide financing.
  1. A home sale contingency permits you to back out of the agreement if you’re unable to sell your current home within a certain timeframe.

These contingencies give you flexibility and protection during the home buying process, allowing you to proceed with confidence.

Title condition

When it comes to purchasing a property, it’s vital to consider the title condition. This refers to the state of ownership and legal rights associated with the property. 

Understanding the title condition in a purchase and sale agreement is crucial as it outlines who holds the rightful ownership of the property and any potential issues related to liens or encumbrances.

It’s essential to ensure that the title is clear and free from any legal disputes or claims that can impact your ownership rights.

Before finalizing a purchase and sale agreement, prospective homebuyers should thoroughly review the title condition with their real estate agent or attorney. This step helps uncover any potential red flags or concerns regarding the property’s ownership status, enabling buyers to make informed decisions before proceeding with the transaction.

Closing costs

When finalizing the purchase and sale agreement, keep in mind that you’ll need to budget for closing costs. These costs typically include fees for services such as appraisal, title insurance, and real estate attorney fees.

It’s essential to factor in these expenses when planning your homebuying budget, as they can add up quickly and impact the total amount needed at closing.

Wherever you end up, you will be required to pay closing costs before taking ownership of the property. Be sure to discuss them with your real estate agent or attorney so you have a clear understanding of what’s involved as you proceed with your home purchase.

Inclusions and exclusions

In a purchase and sale agreement, inclusions refer to the items that will be included with the property while exclusions are those that will not be included.

  • Inclusions: These can consist of appliances, fixtures like ceiling fans or built-in shelving, window treatments, and outdoor items such as sheds or playsets.
  • Exclusions: Landscaping elements like plants and trees may be excluded, as well as personal belongings of the seller that are not intended for transfer to the buyer. Major appliances or furniture may also be listed as exclusions.

How do I get a purchase and sale agreement?

To obtain a purchase and sale agreement:

  1. Contact a real estate agent or attorney.
  1. Request a template or have one drafted according to your needs.
  1. Ensure all relevant details are included, such as the purchase price, closing date, earnest money, contingencies, title condition, closing costs, and inclusions/exclusions.
  1. Negotiate with the seller until both parties reach an agreement.
  1. Review and understand the terms before signing it.
  1. Seek legal advice if you have any doubts about the document’s contents.

After securing a purchase and sale agreement, you’re ready to proceed with confidence on your path to homeownership!

The purchase and sale agreement is signed. Now what?

After signing the purchase and sale agreement, it’s time to organize a home inspection. Seeking professional guidance is essential during this phase. You should also get in touch with your mortgage lender and begin finalizing your financing details to secure your loan before the closing date.

Accelerate your journey to homeownership with a purchase and sale agreement!

After obtaining a purchase and sale agreement, you’re that much closer to closing on your dream home. This legal document outlines the terms and conditions of your home purchase, providing clarity and protection for both you and the seller.

It can help expedite the process by ensuring that all parties involved are on the same page regarding key details such as the purchase price, closing date, contingencies, inclusions/exclusions, and more.

By securing a purchase and sale agreement early in your homebuying journey, you can streamline the process towards homeownership. This essential document not only offers peace of mind but also acts as a roadmap for navigating the complexities of purchasing a property.

When you’re ready to take the next step in your homebuying process, connect with a mortgage expert who can help you explore your financing options.


1. What is a purchase and sale agreement?

A purchase and sale agreement is a legal document that outlines the terms of buying or selling something.

2. Who needs to sign the purchase and sale agreement?

Both the buyer and seller need to sign the purchase and sale agreement for it to be valid.

3. Can I change my mind after signing a purchase and sale agreement?

Once you sign a purchase and sale agreement, it’s hard to change your mind without facing potential penalties.

4. Does a lawyer need to check my purchase and sale agreement?

It’s smart to have a lawyer review your purchase and sale agreement before you sign it to make sure everything is correct.

5. How long does it take for a purchase and sale agreement to become final?

The time it takes for a purchase and sale agreement to become final depends on what both parties agree upon in the document.

Need some extra help understanding purchase and sale agreements? Connect with a mortgage expert today who can give you the low down..


The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.


How to Get out of Debt Fast

Debt can leave you feeling trapped, so learn how to get out of debt fast!

Even when you’re making minimum payments against your credit card debt, interest eats up the bulk of what you pay, and you see only minor gains — if you see any gains at all.

Even worse, when you have multiple debts, it can feel like you’ll never get ahead. After all, you’re already working hard enough as it is, and you’re still struggling with repayment. 

If all this sounds exactly like your personal finance situation, it’s time to ask yourself a very serious question: What more can I do to get out of debt fast?

First, you have to prioritize your debt and attack debts with the highest interest rates first. Second, you need a debt repayment solution that fits your unique financial needs.

While every person’s portfolio looks different, there are best practice solutions most people consider to break free from the shackles of debt and achieve their financial goals.

In this article, we’ll introduce you to the options you can explore to get out of debt, improve your credit score, and otherwise strengthen your personal financial situation. 

Americans are accustomed to financing everything

If you’re considering how to get rid of your debt, the first thing you need to know is that you’re not alone. In fact, most Americans seek financing to cover everything from big purchases, like home mortgages or car loans, to small purchases made with credit cards.

Overall, from 2020 to 2021, debt levels increased by 5.4%. By staying laser-focused on debt management and coming up with a repayment plan that helps you pay down your debt, you can save a significant amount of money over time instead of having your extra cash whittled away by high-interest debt.

Debt-free living made easy

If you’re looking to improve your financial health, raise your credit score, and get debt relief, you’ve come to the right place. Here are some tactics you can use to keep extra money in your pocket. 

Pay the minimum payment plus principal

Unfortunately, if you just cover the minimum balance on credit card payments, you’ll usually end up spending more money on interest than the actual balance.

When you pay more than the minimum monthly payment, the excess funds will help pay down your entire balance. This means high interest rates won’t hurt you, and you’ll be able to whittle down your debt faster. 

Even better: Try as hard as you can to pay your credit card bills in full each month because this type of debt is super expensive. If you’re in a deep debt hole, consider taking on a short-term, part-time job or starting a side hustle until you climb out of it.

How it works

There are two ways to ensure your payment takes a chunk out of the principal of your loan payments: 

  • You can continue to make monthly payments while increasing what you pay to ensure at least some of the funds are applied to the principal. For some debt payments, you can specify on a payment slip or online portal what amount is being applied to the principal.
  • If you can’t pay your bill in a lump sum, you can also schedule a second payment to be made before the due date in the current billing cycle. This will help you spread out your payment allocations but still achieve the same result of paying extra each month — getting you started on your debt reduction journey.

Prioritize payoffs with the debt snowball method

If you’re going to get out of debt fast, you must begin paying some of these debts off. Start by putting your list of debts in order from biggest balance to smallest. Using the snowball method, you pay off your debts with the smallest balance first. By focusing on one debt at a time, you can prioritize which debts to eliminate first.

How it works:

Continue to pay at least a minimum payment on every debt to ensure credit bureaus like Experian still look at you favorably. Then, make additional payments against the debt with the smallest balance until you pay it off in full. After that, start the process over with the next smallest debt balance on your list. 

Or use the debt avalanche method instead

If you’re not keen on the snowball method, you can try the debt avalanche method, which encourages you to focus on the high-interest debt first and work your way down to debt with lower interest rates from there. It’s essentially just a mirror image of the snowball method.

When paying off your debt, there’s no right or wrong method to use. You just need to create a debt management plan and stick to it.

Ultimately, everyone has different financial preferences and is working with different lenders. So, while someone might benefit from the snowball method, another might find the avalanche method to be more effective.

Refinance debt

When you’re trying to get out of debt, keep a pulse on the financial markets and try to recognize you may be able to get better interest rates on your debt compared to your current agreements. If you can, take advantage of these lower rates by refinancing current loans using a debt consolidation loan.

If this sounds intimidating, don’t sweat it. A loan specialist can help you through the process of refinancing a mortgage, home equity loan, auto loan, personal loan, or student loan.

Similarly, you can use credit card balance transfers to lower your credit card debt. If you have a credit card with a high balance, look for opportunities to transfer that balance to a card offering 0% percent APR for a set amount of time. Usually, this will give you six to 21 months to pay off the credit card without any interest fees. That should help you repair your credit report — making issuers happy, which comes in handy if you ever need to take on new debt.

How it works:

This solution requires you to do your research — or at least enlist the help of a credit counseling service. You’ll need to know the current terms of your loans and credit card interest rates. When you recognize opportunities for better interest, work with a trusted financial institution to refinance your loan. If you’re comfortable doing it yourself, just search for 0% APR credit card opportunities. A word of caution: If you plan to transfer a credit card balance, make sure you can pay off your debt by the time the promotion period passes.

Make lump sum payments

If you’re lucky enough to get a significant cash gift or a hefty tax return, put that money towards your debt (assuming you’ve already got an emergency fund built up). One large lump sum extra payment can significantly impact your debt-payoff goals. 

How it works:

This one is easy. When you get a windfall of extra funds, apply it to your balance as fast as you can. 

Settle your debts

At the end of the day, creditors just want to get paid. So, if you’re having trouble making payments while working your way out of excess debt, you might want to try your hand at negotiating with creditors. In many instances, creditors will agree to settle your debts, often for less than you already owe. Keep in mind that debt settlement can adversely affect your credit score if you stop making payments during negotiations. So, choose your course of action wisely. 

How it works:

Pick up the phone and call your creditors if you’d like. If that thought makes you uncomfortable, hire a third-party settlement service to assist with this process for a fee. Just make sure you do your homework to confirm that the settlement company you select is credible. According to the Federal Trade Commission, there are risks associated with debt settlement. You just need to be on the lookout.

The road to financial freedom

Now, you have the blueprint to help you achieve financial freedom! Commit to tackling at least one of these solutions and watch your debt dwindle before you know it.

As you work your way out of debt, continue to analyze your current budget and make a spending plan. By doing so, you will continue to free up resources that can be applied to your debt.

As an added bonus, you’ll learn improved money management skills that can help you avoid future debt. By decreasing your debt, you’ll see your credit score go up — and your pulse rate go down — because living debt-free means living stress-free. 

Here’s to getting out of debt — quickly and painlessly!


The content provided on this website is offered for educational purposes only. While we endeavor to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the content for any purpose. Visitors are advised to consult with qualified experts before making any financial decisions or taking any actions based on the information provided on this website.


10 Questions to Ask Before Making an Offer on a Home

If you’re like most people, a home is likely the biggest investment you’ll ever make. That being the case, you’ll spend a lot of time and energy finding the right place—particularly if you’re going to be a first-time homeowner.

When you’re ready to begin the home-buying process, you’ll probably already know a lot about the house you hope becomes your dream home. However, it’s a good idea to do a little more investigation and get some answers to key questions upfront. As a result, you’ll be able to make your purchase with greater peace of mind.

Reviewing public records as well as talking to the seller and the seller’s agent can fill in details that will help you make a more informed decision. Here are the 10 great questions to consider before making an offer on a home—whether it’s a buyer’s market or a seller’s market.

1. How much did the seller pay for the home?

You should always ask about the original purchase price even if it has nothing to do with the current value of the home.

If the seller bought the house five years ago and didn’t do any renovations, you might not want to come in with a high offer price unless the local market is a very competitive market.

When you know how much the homeowner spent on the house, you may be able to negotiate a better sale price in good faith.

If you’re a first-time home buyer, you might also want to ask the seller why they’re selling their current home in the first place. You might be able to get the inside scoop from their realtor, which could help you win the bidding war with a lower price.

2. What’s the real estate market Like?

As you continue the house-hunting process, spend some time researching how the housing market is doing in the neighborhood you’re considering. You may want to compare all of the homes that have recently sold with all the active, under contract, and active listings in the past year or two.

See how the home’s listing price compares with other homes on the market. Is it the most expensive or least expensive property? Does the home price fall somewhere in the middle?

If you’re able to find a dream house that has a reasonable asking price, you may end up entering into a purchase agreement that leads to strong financial returns down the line.

3. How long has it been on the market?

In the real estate world, DOM stands for days on market. Generally speaking, the longer a home is on the market, the less it sells for. The DOM clock starts as soon as a house is listed for sale. Only when a transaction is categorized as “pending” does the clock stop.

The longer a home sits on the market, the more questions you should be asking. Maybe the listing is sloppy or has inaccurate information. Or perhaps there’s something wrong with the house that keeps coming up during home inspections, which is causing the seller to experience a pattern of failing deals.

Whatever the case may be, the longer a house sits on the market, the better the chances are that you will get a more favorable sales contract if you continue pursuing the property.

4. What is the market value of the home?

The market value of a home is a key factor to consider before making an offer. After all, the last thing you want is to pay New York City prices if you’re buying a home in a rural area of Iowa.

Unfortunately, this isn’t an easy question to answer. For the best results, you can enlist the help of a real estate agent to answer this question by conducting a comparative market analysis.

Comps, or recently sold properties that are comparable to the one in question, can help you determine what to offer based on sales in the area. Agents who are familiar with the market know what houses sell for, what sort of offers people are making, and how to compete. They can also walk you through the earnest money deposit process and help you figure out how much to put down for a down payment, whether you need to make a cash offer to win a deal, and how much to counteroffer when there are multiple bids.

At the end of the day, it’s impossible to know whether you’re getting a good deal on a home sale unless you know how the local market has been performing.

5. Are there any problems with the house?

Even though they’re not legally required to do so, some sellers will share information about the home that paints it in a negative light. For example, a seller might say that the septic tank will need to be replaced within the next year.

Sellers do this so that things like an inspection contingency or an appraisal contingency don’t kill the deal. After all, they don’t want a prospective buyer to get to the inspection

It’s not in their interest that you get to the inspection stage, discover a problem, and subsequently back out of the deal. So, be attentive to the seller’s information about the home’s condition. You may find out that key fixtures have been updated lately, which is good.

6. What’s the resale value like in the neighborhood and what will it likely be in the future?

Since a house will be one of the biggest purchases you’ll ever make, your investment should hopefully become more valuable over time. Getting the perspective of your real estate agent and your mortgage loan officer will increase the chances you make a good investment.

The ideal house should be located in an area where property values are consistently rising. By buying a house in such a location, you can get better gains from the sale of your home at some point in the future.

Of course, just because a neighborhood is performing well now doesn’t mean that will always be the case. Population changes, new construction, and other events could cause your home’s value to decrease over time. If you think a house is likely to depreciate soon, pass on the deal.

One way to gauge whether a neighborhood is trending in the right direction is by attending a few open houses in the area and just talking to owners and agents. Keep your ears open; you never know what you might hear.

7. What are the closing costs?

When you’re buying a home, money is incredibly important. This is why it’s critical to find out whether you qualify for mortgage preapproval before submitting an offer letter. After all, the last thing a seller wants is to enter a deal that has a financing contingency.

As your mortgage lender will tell you, a preapproval letter is only the beginning. There are tons of costs to consider during the real estate process, including closing costs, which are one-time fees that you’ll pay when you complete the sale.

In most cases, closing costs tack on an additional 3% to 4% of the total purchase price. For example, if you purchase a $300,000 home, closing costs will amount to $9,000 to 12,000 on top of that. These costs include appraisal fees, inspection fees, lawyer fees, notary fees, and taxes related to land transfers.

Additionally, there are some one-time costs that aren’t included in closing costs. Plan for any renovations you may need for your new home, including moving expenses and utility setup costs.

8. How old are important components of the home?

A home’s appearance is less important than its age or how recently it’s been renovated. Eventually, important components of the house—such as the water tank, air conditioner, heating system, septic system, plumbing, electrical system, and appliances—will need to be repaired or replaced.

Of course, no equipment lasts forever. But before you sign on the dotted line, you need to be aware that old or poorly maintained appliances might need to be replaced, and that you may have to spend a great deal of money sooner than later if the seller hasn’t updated them in a while.

9. Are there any other offers on the table?

Unfortunately, you may be up against multiple offers when you go to buy a home. That being the case, it’s good to understand what you’re up against so you can prepare a well-timed, competitive offer for the property.

10. How soon can the seller close?

Before making an offer on a home, it’s also important to understand the seller’s timeline. How much time does the seller need to move out? Has the seller found a suitable property yet? What is the seller’s preferred closing date?

The seller’s timeline is not only important for ensuring that your offer fits within their timeline but it also helps to structure your offer in a more attractive manner. 

Suppose you’re currently renting and must leave your apartment in 45 days but the seller wants the deal to close in 90 days. In this scenario, entering into an agreement may not be the best idea.

Get informed to make the right offer

A real estate transaction is one of the most important investments you’ll ever make in your life.

That being the case, you need to ask important questions to determine whether the house is right for you and what the best price might be.

To do that, identify a trustworthy agent you can work with to find your dream home and make an offer that meets your needs and budget.

Here’s to landing an awesome property you’ll love for years to come!