Georgia Home Buyer Frequently Asked Questions (FAQs)
Buying a home in coastal Georgia is easier than you may think! Here are some of the most frequently asked questions by our clients on buying a home with a Realtor®.
Lender Pre-Qualification
What's the first step in buying a home?
The first step in buying a home in Georgia is to get pre-qualified for a home loan with a mortgage lender.
Why should I get pre-qualified?
Once pre-qualified you'll know how much home you can afford, and your monthly mortgage payment, including property taxes and homeowner's insurance. This will allow you to begin your home search with confidence! Your lender will also help you determine which loan program is right for you, such as:
Department of Veterans Affairs (VA) loan
Federal Housing Administration (FHA) loan
U.S Department of Agriculture (USDA) loan
Conventional loan
Why do I need a lender pre-qualification letter?
Once you find the perfect home, your lender pre-qualification letter is included with your purchase offer to inform the seller that you're qualified and ready to purchase the home.
Closing Costs
What are closing costs?
Closing costs are those associated with the purchase of your home. They include items such as the home appraisal, property taxes, homeowner's insurance, lender fees, closing attorney fees, state and local taxes, etc. Your lender will breakdown and explain costs in your closing disclosure.
How much are closing costs?
The amount depends on the sales price of the home, property taxes, home insurance, etc. Your mortgage lender can estimate closing costs for the home you're interested in.
Who pays closing costs?
Closing costs are paid by the home Buyer. However, Buyers can sometimes negotiate a contribution at closing from the seller.
Earnest Money
What is earnest money?
Earnest money is offered by Buyers as good faith of their intention to purchase the home. Although it's not a legal requirement in Georgia, it's common practice.
How much earnest money will I need?
There is no set amount for earnest money. It can be whatever amount both Buyer and seller agree to.
What happens to my earnest money when I purchase the home?
Earnest money is applied to Buyer closing costs.
What happens to my earnest money if I don't purchase the home?
If home Buyers terminate the purchase agreement during the due diligence option period, financing contingency period, or appraisal contingency period, their earnest money is refunded.
Due Diligence Period
What is the due diligence period?
This option period is the home Buyer's opportunity to examine the home, assess the home's condition, and decide whether or not to proceed with the purchase.
How long is the due diligence period?
The due diligence period can be any number of days agreed to by Buyer and seller.
What happens during the due diligence period?
We strongly recommend that Buyers hire an experienced local home inspector to examine the home and provide a written assessment of the home's condition. Additionally, the Buyer should personally inspect the home and investigate any concerns.
What if I have concerns about the home during the due diligence period?
Home Buyers have the option to negotiate concerns with the seller, including home repairs or other seller concessions.
Can I cancel during the due diligence period?
This is the Buyer's option period. Home Buyers have the right to unilaterally terminate during the due diligence period, without penalty.Earnest money is refunded to the Buyer.
Home Inspection
What is a home inspection?
A home inspection is a limited visual inspection & general assessment of the home's condition. The home inspector will provide an opinion on the home, including potential concerns, in the form of a written report. Home Buyers can utilize the report as a tool to better understand the condition of the home. Additionally, Buyers should personally inspect the home and investigate any concerns.
We strongly recommend the home inspection be completed during the due diligence period, allowing the opportunity to negotiate repairs, additional concessions from the seller, or unilaterally terminate the purchase agreement.
Who orders the home inspection?
The home inspection is ordered and paid for by the home Buyer during the due diligence option period.
How can I find the right home inspector?
Selecting the right inspector is key. Buyers should choose a qualified and experienced home inspector. We can also recommend competent and trusted local home inspectors.
Financing Contingency Period
What is the financing contingency period?
If home Buyers are turned down for a loan by their lender, they can terminate during this period by providing a loan denial letter to the seller. Earnest money is refunded to the Buyer.
The Buyer's rights under the amendatory clause exist even after the expiration of the financing contingency period for VA & FHA loans.
Home Appraisal
What is a home appraisal?
A home appraisal is a standardized third-party assessment of the home's value. The appraiser independently determines the reasonable or fair market value of the home, ensuring that Buyers don't pay more than the home is worth and lenders don't lend more than the home is worth.
Who orders the home appraisal?
The home appraisal is ordered by the mortgage lender, and should be completed within the appraisal contingency period for both United States Department of Agriculture (USDA) and Conventional loans.
Appraisal Contingency Period
What is the appraisal contingency period?
If the home's appraised value is less than the purchase price, home Buyers have options during the appraisal contingency period for USDA & Conventional loans:
Negotiate the Price. Buyer can attempt to renegotiate the lower purchase price with the seller.
Pay the Difference. Buyer can chose to pay the difference in cash, at the closing.
Terminate. Buyer can terminate the purchase agreement, without penalty. Earnest money is refunded to the Buyer.
The appraisal contingency period does not apply to VA & FHA loans because the amendatory clause prevents Buyers from being compelled to pay more than the appraised value of the home.
VA Amendatory Clause
What is the VA loan amendatory clause?
When Buyers choose to finance their home purchase with a VA loan, a qualified appraiser determines the home's reasonable value by completing a Veterans Administration (VA) appraisal.
The home Buyer's loan amount cannot exceed the VA appraised value. If the loan amount does exceed the appraised value, Buyers have options:
Negotiate the Price. Buyer can attempt to renegotiate the lower purchase price with the seller.
Pay the Difference. Buyer can chose to pay the difference in cash, at the closing.
Terminate. Buyer can terminate the purchase agreement, without penalty. Earnest money is refunded to the Buyer.
FHA Amendatory Clause
What is the FHA loan amendatory clause?
When Buyers choose to finance their home purchase with an FHA loan, a qualified appraiser determines the home's reasonable value by completing a Federal Housing Administration (FHA) appraisal.
The home Buyer's loan amount cannot exceed the FHA appraised value. If the loan amount does exceed the appraised value, Buyers have options:
Negotiate the Price. Buyer can attempt to renegotiate the lower purchase price with the seller.
Pay the Difference. Buyer can chose to pay the difference in cash, at the closing.
Terminate. Buyer can terminate the purchase agreement, without penalty. Earnest money is refunded to the Buyer.
Buyer Agreements
What is a buyer agreement?
A written agreement is required by Georgia state law when a real estate broker has a client relationship with the home buyer and by the National Association of Realtors® when working with home Buyers prior to touring a home (in-person or virtually).
What is an exclusive buyer brokerage agreement?
It's simply a written agreement between the home Buyer and broker which establishes a confidential client relationship. The Georgia Realtors® Exclusive Buyer Brokerage Engagement Agreement permits the Buyer's broker to act exclusively on the Buyer's behalf in locating, negotiating the purchase of real property, and completing the purchase offer for the Buyer's review and approval.
Home buying questions?
Experienced and highly-rated local Realtors® are here to answer all your home buying questions. Contact us today and start your home search to find the coastal Georgia home that's right for you.
