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Frequently Asked Questions About The Home Buying & Selling Process

Answered By Kersten Reed Bowman

What is an Earnest Money Deposit (EMD)?


The EMD is a monetary deposit held by the Title Company in a real estate purchase in order for the Buyer to show good faith in their process to complete a home purchase.  It is typically a percentage amount (1-2%) of the purchase price, however it is negotiable.

Are home inspections mandatory?


No. A private home inspection is not required for any loan or cash transaction, however I do recommend them. Depending on the size of the home, most home inspections can cost $400-500. You typically have 15 days to complete this particular inspection, however the timeline is negotiable. 

What is a Wood Destroying Organism (WDO) Inspection?


A WDO Inspection is a written report of an inspection on a home for visible and accessible evidence of an infestation or damage by wood destroying organisms. A WDO Inspection is required by most lenders in order to complete the loan process.

Do all homes provide a home warranty?



How much are closing costs?


Closing Costs will vary per real estate transaction and are different depending on if you are the Buyer or Seller of a property. Working with a local lender and title company will allow you to view a tentative amount prior to purchase. Some costs that can be associated with closing are: Doc Stamps on the Deed, Settlement and Recording Fees, Title Insurance Fees, Survey(s), Appraisal(s), and many other costs. The closing costs for most transactions will be roughly 1.5-2% of the purchase price. ALL closing costs can be negotiated.

Who pays commission for using a real estate agent?


The Seller of the transaction typically pays for Real Estate Agent Commissions and Fees.

How long does a Residential Real Estate transaction take?


Residential Real Estate transactions can fluctuate throughout the process due to extensions to the contract, holidays, or other delays.  However, the majority of residential real estate transactions take 30-45 days from the point of an executed contract between the Buyer and Seller to the closing date.

Do I have to be physically present to purchase a home?


No. Programs such as DocUSign and ESignature have made the process of going under contract to buy or sell a home from afar a breeze. In addition, a Title Company can do an overnight mail out for all final documents requiring a wet signature and a notary.

What are the initial steps for someone interested in investing in real estate?

First and foremost, you need to decide on the type of financing that may be beneficial to your portfolio. If cash, you'll need to be able to provide those proof of funds. If financed, you'll need to have several tax documents available and other items a loan officer may require. Once you know your budget, you can then decide if your investment needs to be a long term (more than 4 years) or short term (1-3 years) hold and if during that length of time the property should be used for long- or short-term income production based on your financial situation mentioned above or perhaps a primary or secondary residence.

How does one qualify for a real estate investment loan, and what are the typical requirements?


Typically as a Real Estate Agent we pass the baton over to qualified loan officers. However, it is always great to understand the initial requirements that may be needed to begin the loan process. Usually, an investor will need two years worth of tax documents, two months of bank statements, and two years of W2's if applicable at a minimum.

Can you offer general advice for first-time homebuyers looking to invest in housing?


Get in the game! However, swing for the fences on your first home. First, understand the cost of home ownership, the need for home maintenance, and the reality of the wish list you desire. Once you are comfortable with the commitment of owning your first home, let's knock it out of the park! I've seen countless first-time home Buyers reaching for their maximum qualifying budget, not understanding the need to save for that possible rainy day. 


What are the key factors to consider when evaluating the potential return on real estate investments? 


Every market is different.  Along the Emerald Coast specifically, you want to evaluate the cycle of people coming into and out of the area for both professional commitments and vacation. This will allow you to determine the initial cash flow of the property or long term rental return and the peeks & valleys thereof. Then, you want to determine the most desirable locations for either option when choosing your property. Plus, let's not forget maintenance costs and the cost of ownership of each property. They can vary depending on the age of the home, homeowners' association fees, insurance options, and more.  

Kersten would be happy to provide you with information on any additional questions you may have. Just fill out the contact form or call 251-455-8177


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